Tuesday, May 10, 2005

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.'"

12 Comments:

At 8:41 AM, Blogger Nayrab said...

Look for the house dumping to begin. I remember someone said awhile back; This June should show flat year-to-year increases in home appreciation, due to the way the NAR calculates appreciation; and once that happens the flippers/speculators will start to unload.

BTW, who would ever listen to the wisdom of a realtor regarding the housing market. Most of these people only have a H.S. diploma (and a realtor license). Their only hope for a decent income in life is to become a realtor. One of our good freinds finished H.S. and dropped out of college after one semester. He then spent six years delivering pizza before he woke up and decided he better find a career. He chose to become a realtor.

 
At 8:44 AM, Anonymous Justin said...

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.

 
At 9:19 AM, Anonymous Anonymous said...

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.

 
At 9:32 AM, Blogger goleta said...

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.


As time goes by, speculators or home owners out stretch themselves will have to give up. The longer they hold the houses, the more money they will lose. We're just running out of high income people to keep the pyramid game going.

 
At 9:48 AM, Anonymous wiseoldowl said...

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.

 
At 10:07 AM, Anonymous Anonymous said...

Considering how sticky (inefficiency) the housing market is, we are actually seeing all cards falling in slow motion.

 
At 10:24 AM, Anonymous Anonymous said...

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

 
At 1:05 PM, Anonymous katie said...

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.

 
At 4:08 PM, Blogger goleta said...

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 and thanks to Prop 13, those who bought their homes more than 4 years ago with fixed rate mortgate don't see any increase in monthly payments.

Still, if owners of those 50% houses want to sell their home, they can only find buyers in 5% of the population with the current prices. The rest of the population do not have enough income to pay the high property tax and mortgage payments.

 
At 4:15 PM, Anonymous Anonymous said...

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

 
At 7:20 PM, Anonymous Anonymous 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.

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.

 
At 7:40 PM, Anonymous ChrisH said...

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.

 

Post a Comment

<< Home