Posted on 07/26/2004 11:44:26 AM PDT by Pikamax
U.S. Existing Home Sales Rose to a Record in June (Update4) July 26 (Bloomberg) -- U.S. sales of previously owned homes unexpectedly rose to a record 6.95 million annual pace in June, pushing prices to their highest ever, an industry report showed.
``When you combine the fact that people are working and we have low mortgage rates, you get a healthy housing market,'' said Tom Kunz, chief executive officer of Cendant Corp.'s Century 21 real estate unit. Prices ``may not rise like they have in the past but I don't think we'll see a decline.''
Existing home purchases increased 2.1 percent from a 6.81 million-unit rate in May, the National Association of Realtors said in Washington. The median selling price rose 5.2 percent to a record $191,800.
The economy so far this year had the strongest six months of job growth since 2000, while the average rate on a 30-year fixed mortgage is less than a percentage point above an all-time low. Sales of previously owned homes in 2004 are forecast by the Realtors group to surpass last year's record.
(Excerpt) Read more at quote.bloomberg.com ...
I could not believe what was going on a couple years ago already, and refi'ed to a 30 year fixed - conservatively, too. Didn't take any money out.
Something's going to crack.
..."since the margin for profit is shrinking and his read of the market is to get out."...
same with the builders down by the beach in So Cal. they say their property inventory has increased from 100 homes to around 500 in the last 2 months. They've stopped work on a few of the grading plans and stuff for the latest properties they've bought and torn down.
time to sell and cash in some equity. maybe rent for a few months until the prices go down a bit, then jump back in.
ownership has been great...made more money with my house than I have at work.
"That is weird stuff .... why anyone would not take a 30 fixed right now is crazy"
Not necessarily. I just bought a house in MN. I paid cash, generated by the sale of my house in CA. Why would I want any kind of mortgage. Oh yeah, the CA house was paid for too.
No doubt about that...didn't mean to imply that real estate was easy.
However, as interest rates rise, so do rents...
This helps many cover their debt service.
Rents that are cheap are $900 and are easily $1600 most lower average places.
When that goes up, crime will rise and multiple families will live in one dwelling far more. Income will not rise in rents at all much further without delinquency in payment.
People can't afford it and when Commercial Appraisers consider vacancy and bad debt, the ones I talk to say the bad debt will rise sharply in the future if rents rise.
Only in our outrageous wealthy parts of town here in CA, like our ocean towns will things hit the sky with rent prices with less trouble.
As did plenty of other people. However, in the interest of full disclosure, you're not revealing the underlying cause behind the early 90s meltdown in SoCal.
No one expected the Russians to give up so abruptly in '89. When they did, huge billion-dollar defense contracts were cancelled throughout the SoCal aerospace industry.
In effect, this was the equivalent of a perfect storm, since the 80s had had a 8-9 year run-up in prices. So many people had bought at the end of the run-up that they couldn't maintain the mortgages when the job cuts came.
We have the direct opposite occurring right now. (1) this is the beginning of a 7-8 expansionary cycle, not the end and (2) [at least in SoCal] the economy is very diversified, so no single hit will tank the entire market like before.
Crazy as it seems, I think we'll still see another 100% increase over the next 6-7 years. When the correction comes, prices at the nadir will still be higher than they are right now.
There are people who could barely afford to be in these homes who did so with variable rate and interest only loans and they well start the return of property to the banks as soon as the economy moves a little south.
Carl had investments out of CA, so this was NOT only a CA issue.
I've seen it crash and go up several times now.
So when it crashes next, as long as you can pay your loan for 6-8 years, it will bounce back to where it is. No worries!
And in my area, your choices are 1) high rents 2) buy a condo or townhome, 3) plunk down 600k min for a house, or 4) move 50 miles from work and pay a lesser but still high price for a home.
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