Prices Flat In "Shocked" Santa Cruz
The Santa Cruz Sentinel reports that home prices didn't rise in April, "for once." The median price for single-family homes in April was $715,000; March’s median was $723,129. The average price of a single-family home last month was $803,238, the second time it’s been over $800,000; the average in March was $821,695."
One realtor says the easy money loans are propping up the market. "The continuing high housing prices, said Szychowski, are the result of those low interest rates, combined with low inventory and the loans available."
"The interest-only loans have pulled in another huge buying pool,' he said. 'We’re seeing a lot of dual incomes and a lot of big down payments on the move-up buyers, which is new equity created by this run-up.'"
9 Comments:
One of the things the Japanese RE bubble did before the crash was create a big wealth disparity between homeowners and non-homeowners. I'm seeing a lot of the same thing now. Especially in Santa Cruz, etc. So much money flying around, it's ridiculous. I had a friend who lived in the bay area who couldn't afford to have his wife not work even on a $100,000/year salary.
The day of judgement is coming. Market always punishes excesses. It is a bit slow, but it is spreading to the Bay Area as we speak.
I find it curious that many people feel that we might see a few markets decline while most of the US RE market stays buoyant.
Remember what Confucious say: a house of cards does not fall one card at a time.
Considering how sticky (inefficiency) the housing market is, we are actually seeing all cards falling in slow motion.
From the data, Shiller concludes that there is a "high likelihood of an eventual decline in Los Angeles" real estate
http://biz.yahoo.com/cbsm/050510/044a1b2094824600aa90aed01df9b7dc.html
We all need at least $250K salary to be able to afford a median-priced home in most coastal areas of California. Problem is less than 5% of the families are paid that well.
The discrepancy between 50% of the houses and 5% of the population is huge. That means 45% of the houses are either owned but not used as primary homes by the very rich people or owned by people who can not really afford them.
That would be 45% of homes being purchased recently, not 45% of all homes, as obviously many people who bought their homes at manageable prices >4 years ago still own them.
katie said...
That would be 45% of homes being purchased recently, not 45% of all homes, as obviously many people who bought their homes at manageable prices >4 years ago still own them.
Katie, you're right
That would be 45% of homes being purchased recently, not 45% of all homes, as obviously many people who bought their homes at manageable prices >4 years ago still own them.
Please find me someone who bought a CA home 4 years ago that did not refi themselves into about twice the debt they started with.
I bought one 3 years ago and haven't done a re-fi. So I'm one. But of course I'm also intelligent enough to see that the housing market is overinflated. The vast majority of my neighbors have done refis though. That's what they talk about at the Neighborhood Watch meetings.
And I'll also tell you my lender (Countrywide) constantly calls me and sends me letters begging me to re-fi. I was considering it for awhile because I still have a bare dirt backyard. However, I think the market is out of control and the values of the homes are not based in reality. With my luck I would refi and then values would crash and be upside down. I want to avoid that at all costs.
I don't NEED a backyard. I can wait until I can afford it and things calm down a bit.
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