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.
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.
I don't think that a 10% rate on mortages, two years down the line, is too radical a prediction to make. Inflationary pressure from low rates and low unemployment will cause a tightening of the money supply at some point, and many many people are positioning themselves for catastrophe when that happens by taking out interest-only loans on overvalued real estate.
Now they are saying this is MORE proof of a bubble. "Last hurrah", says AP.
One would think these strong new sales would help cut into that inventory somewhat.
would effect the low end of the market in socal. But worth a try.
Existing owners can afford to wait. Homebuilders cannot. They have to unload fast.
Manhattan is remarkable. Prices in all the other boroughs and burbs fell sharply in October. But Manhattan held unchanged and condos under $2 million actually rose in price on average.
And you may want to wait for the seasonally adjusted numbers. You're comparing apples to oranges. Also, there is no mention that the number of homes on the market has tripled since last year.
I can say that I've been watching the real estate market here for a good 2 years. I get e-mails of listings daily. The past 3-4 months have seen a turnaround. I see the same listings with "priced reduced". I see comparable homes that were going for $350 now listed at $299. Sellers offering to pay all closing costs, builders adding up to $50,000 in free extras. Some condo sellers are offering remodeling at their expense or condo fees (including utilities) paid for a year. Time on the market has also increased from days to 3-6 months.
Granted, I'm largely watching the condo markets, but traditionally, they're the first ones to drop. After watching it take off for two years, this is the first time I'm seeing a very shaky market. I don't think there's a "bubble" that will burst, but an adjustment is already occurring.
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