Posted on 11/29/2005 7:03:30 AM PST by SoFloFreeper
WASHINGTON (AP) -- The Commerce Department reports that sales of new homes surged to a record annual rate of 1.42 million units in October.
Doncha hate it when a housing bubble just refuses to burst time after time, month after month, year after year?
...in what could be a last hurrah for the booming housing market.
Aww...I see, they have to add that in the lead to TEMPER the good news. LOL.
see post three. they found a way to put some bad news in the story. :) They are so predictable.
let me know when the popluation goes down and I'll be worried.
PLease ping all the sky is falling posters who "prophesied" a major housing bubble
But how can people be buying homes? They all work at Walmart for $7 hour?
But, but, but, what about the bubble?
Expect a certain doom n gloom texan freeper to avoid this thread like the plague.
ping, sourpuss. :)
Remember, it's different this time.
Ruh Roh... those who prophesy, and await the coming of the bursting bubble .... may just get a fat wet raspberry instead.
Inventories of unsold homes are also at their highest in 18 years, which is bearish for the housing market.
Well there goes another DNC talking point
I think that’s half the story. Sales are still high, and that has pulled more homes on the market from people cashing out, figuring that prices or at their peek.
Nashua's nice, but I'd head a bit further North, and I'd do all I could to avoid Rt 3 and that southern trek each morning.
Just read this in our local paper this AM. Our area's prices are still rising.
http://www.sptimes.com/2005/11/29/Business/Bay_area_home_prices_.shtml
One could also argue that the increase in new home sales is the result of the big building companies dumping in anticipation of price decreases. I am not sure that volume numbers can be interpreted as positive or negative for the market without other evidence.
In the long term, if housing prices continue to rise at a much higher pace than after-tax incomes, then it seems that the marginal buyer will be priced out of the market, which doesn't bode well for further housing price increases.
Surging new home sales are more indicative of a bubble than not. What you're witnessing is a "blow-off top". Mortgage rates are rising and anyone on the fence is deciding to jump in now before they're priced out.
Whether or not there's a "bubble" is debatable, but in some real estate markets, it's pretty clear that prices have gotten way out of hand (e.g. San Diego)
It's not just the liberal media to blame.
Would you take gardening advice from your dentist?
Would you take engineering advice from a taxi driver?
Would you take stock market advice from your real estate broker?
Probably not.
Why then do we take as gospel real estate advice from stock and bond peddlers?
Stock and bond people are the ones behind the bad-mouthing of the real estate boom. Stock and bond peddlers compete /against/ real estate brokers for your money. Since the dot com bust, real estate has soared and the stock market is about as exciting as watching a parked subaru for years on end.
If you want stock and bond advice, go to one of their peddlers. If you want to know what's going on in the real estate market, talk to your broker. My broker is busy as hell with potential buyers and complains about a lack of inventory (sellers) under $500k.
One last bit of advice: Though I love Fox News, when it comes to real estate, don't believe a word out of Neil Cavuto's mouth.
"bubble burst" Ditto. But what I really hate are all the doomists on this forum who perpetually wring their hands and predict DISASTER!!! ...even when good economic news comes out. For these people it's never a case of maybe we'll have a slight dip or decline. Oh no, we're headed for DISASTER!!!THE SKY IS FALLING!!!! I guess for some people being constant pessimists satisfies a large inner yearning to be eternally miserable.
The time frame is 18-24 months for the housing bubble to pop. I'm patient and will stick by my prediction until they repeal the laws of market economics.
Tiny bubbles....
Yep - they were gloating about a decrease in used home sales, now we find that new home sales are on the rise - still...
Wow!
Houses down here have really appreciated, it still amazes me when I see what a house has sold for. I imagine your area's seen even more appreciation.
I told my husband we could never afford to change houses because the "new" house taxes after the property was reassessed would be more than our mortgage ever had been. Under "save our homes" we do really well because we've owned the same house for 17 years.
Alan Greenspan is deeply saddened..........
I am unable to afford a house in South Florida at this time, I may have to move to another state. I have been sorta hoping for a bubble "burst", not a full burst, just a tempering of pricing. Prices down here are insane, really, I think we will make California pricing look decent.
Judging from the DC area market, a good reason they "soared" was the new incentives and lower prices. Everything on the market now has free upgrades, help with closing costs, and yes, priced about 10% lower than they were last spring.
I assume that’s viewed a bad news, but it also implies future shortfalls in supply as homes scheduled to sell next year are already sold. And prices generally held even through the accelerated dumping.
Generals always fight the last war. Same goes for investors and reporters. Market crashes were predicted for 20 years until no one believed them, and the tech bubble resulted. Now real estate is rising, and the same group is referencing the tech bubble model to predict the future. Because so many people are predicting a housing bubble burst, there will not be one. Excess air is being let out every day. The market is managing it.
My brother visited from Orlando over Thanksgiving. He is planning to make the move to Norman, OK, within the next few years and cannot believe how much cheaper house prices are here in Norman. His house has more than doubled in a short period of time in Orlando. He could pay cash for the same type house here and have probably $100,000 or more left over.
Good advice!
NPIDS
Would you agree that any housing bubble will only be regional in nature?
LOL! He's the first one I thought of when I read the headline.
I would agree that we will see differing severity, with the least impact on high-demand urban/suburban areas. But excepting Manhattan and downtown San Francisco, I don't think anyone will be unaffected.
Yes but the degree of "affectivness" on some will scarely be felt
Any housing bubbles will be regional in nature unless thoughtomator is expecting a 9% national unemployment rate or 10% mortgages. History shows that broad declines in the value of real estate require an impetus like large increases in the rate of unemployment or interest rates.
I'm in Sarasota and can't believe what's happened here over the past 5 years. Thank goodness for the homestead exemption. I heard talk that there might be a referendum in 2006 asking voters to approve a portability law that would allow Florida residents one move with their property tax rate holding at the current level.
Have either of you heard anything about this? I'm sure the Realtor's Association will be all over this so it just might have enough momentum to make the ballot.
I heard the same rumor, but also heard that the details of such a "law" could be very hard to work out.
For us, the appreciation has been great, but for younger people trying to afford a house, as I said, their taxes per month, if they bought my home today would be more than any mortgage payment we ever made.
The "save our homes" cap is what kept us in our home, when we needed a bigger house because my MIL needed to move in with us. We renovated, adding extra rooms, deck, etc. (and I'm glad we did, our taxes did rise, but assessment was only on portion that was added), but it would have been easier (maybe cheaper, in the short run) to just find another home in the area, especially with the building codes in place, since we had to bring our entire house up to Miami-Dade code (but the extra expenditure in taxes if we had relocated would have been huge.)
>> let me know when the popluation goes down and I'll be worried. <<
That's EXACTLY what I've been telling people. Of course, as someone who doesn't own YET, I don't say "worried"; I say "shopping." :^D
That's too bad but not surprising. This rapid appreciation will only serve to keep homeowners where they are, limiting inventory and pushing prices up even more. With the first wave of baby boomer's reaching retirement, demand will only increase as they look for warm weather, golf courses and a place to put their boat. This bodes well for places like St. Pete, Sarasota and Naples.
The only thing that could derail this, IMO, is the incredible cost of wind insurance. If we get a few more big hits over the next few years, we might see more insurers leave the state and force an increase in premiums to the point that insurance costs residents more than their property taxes.
It is possible that this is a Katrina bump.
Destroy 1 million or so houses in 3 states and you might see a surge in demand for new houses since the old houses are gone.
If we deported the 10 million or so illegals, would that do it ?
There is no nation-wide housing bubble. There is in the words of Greenspan regional "irrational exhuberence" by those on the coasts and in growing metropolitan areas. These values skew the rest of the market. Is it possible that much of the inflated values in these areas appear to be people investing more money in housing after 9/11 rather traditional investing markets? Possibly. But very little housing values were affected in the typical suburbs. At most, they may have flattened a little, but no huge drop. Any dramatic drop in other areas typically involved communities where significant employers imploded (ie airlines) who were affected by 9/11. Which would behoove a state or major metro to spread their revenue sources broadly, so that not everyone in the nieghborhood is trying to dump their home.
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