When will real estate prices begin rising again?

  1. You have chosen to ignore posts from grglga. Show grglga's posts

    Re: When will real estate prices begin rising again?

    [QUOTE]Hopefully, RE prices won't rise again for a long time. If they fall far enough, first-time homebuyers might be able to buy something. Right now, many of us are watching from the sidelines, down-payment in hand, waiting for something affordable that isn't a dump or in the ghetto. Why are people panicking now that housing prices are falling? The sky-high housing prices of the last few years weren't sustainable. Prices doubled in 5 years, but incomes stayed the same.
    Posted by Giordana[/QUOTE]
     
  2. You have chosen to ignore posts from grglga. Show grglga's posts

    Re: When will real estate prices begin rising again?

    [QUOTE]Hopefully, RE prices won't rise again for a long time. If they fall far enough, first-time homebuyers might be able to buy something. Right now, many of us are watching from the sidelines, down-payment in hand, waiting for something affordable that isn't a dump or in the ghetto. Why are people panicking now that housing prices are falling? The sky-high housing prices of the last few years weren't sustainable. Prices doubled in 5 years, but incomes stayed the same.
    Posted by Giordana[/QUOTE]
     
  3. You have chosen to ignore posts from grglga. Show grglga's posts

    Re: When will real estate prices begin rising again?

    Great comment. Most seem to forget that sustainable prices are based on income and affordability.  The market can bubble based on easy credit but based on affordability indexes many markets were way over priced.  Bubbles usually over shot to the down side.  
     
  4. You have chosen to ignore posts from grglga. Show grglga's posts

    Re: When will real estate prices begin rising again?

    [QUOTE]What is happening right now is totally unprecedented. We have never had the global economy we have today and we certainly have never had the wealth destruction that is now taking place. These two factors along do not bode well for housing prices for many years to come. I suspect with the pending home sales report out yesterday that we may see sales boost in numbers a nit in some areas. This will occur mostly in the massive bubble states such as CA, FL, AZ and NV. The large majority in that uptick is REO and short sales which do nothing to decrease inventory and typically move the market further downward as witnessed in past recessions. This is a direct result of the massive dumping that is now happening, and will continue to happen by lenders throughout the country. We have had over 3 Million foreclosures in the past 18 months and according to most estimates we will have roughly another 1 Million before the end of the year. This number is based on the recent numbers and trends taking place today. California alone has plummeted in price by 41% as of last month. California sales had a small uptick last month and so did there inventory. Inventory is one of the big problems right now and the problem is not going away anytime soon. We have millions upon millions of empty homes in this country (17-20 million by most estimates) of which roughly 2.5 Million are for sale in some manner at this moment in time. The problem is all of the numbers are being skewed that we use to figure out where we are at. This makes the numbers appear to not make sense, but they do when you dig deeper into it. How can inventory be rising in CA when sales had an uptick and new build has crashed? The answer is what we refer to as shadow inventory and there is a lot of it. This inventory is held by lenders as foreclosures and they are working behind the scenes on bulk transactions to rid themselves of this over supply. The sales when they take place show up in the numbers, but this shadow inventory does not. The existing home sales market right now is… well pretty much non existent. REO and Short sales now make up close to 50% of the transactions nationally and that number will go higher. Through comps in these and all neighborhoods surrounding these sales we see massive dilution of household wealth being stripped literally overnight. This will also continue as lenders rid themselves of more and more of this shadow inventory. Another issue on price is basic fundamentals and we are still pretty far off in many areas. Price to income is still way out of line in many areas around the country and pretty much nationally rents to mortgages are out of line as well. All RE is indeed local, but all localities are currently under stress. Prices will continue to fall until these fundamentals are put back into place. With the massive job losses we are encountering along with the massive inflation we have been experiencing (especially food and energy, which by the way does not appear in the actual Fed inflation figures) these figures themselves keep declining. That simply means home prices much fall even further in those areas most impacted by this. The other issue is typically corrections swing high meaning that we will probably over correct. That is why you see a small bump up after a recession nears its end. We are far from that point however. What we are seeing now is what is referred to as a suckers rally or premature bounce which will only lead to a further fall to the appropriate level the market deems necessary. Don’t buy into this hype as it is not real and based on any sound data. In fact it flies in the face of the data that we have been seeing come out. The credit crunch and subsequent insolvency issues that now face so many companies is real and market stifling to say the least. It does not matter what the Fed and / or Treasury does right now, as it cannot stimulate a debt burdened society. No matter how much liquidity it tries to move into the system it just will not work. The issue is not about money, but rather it is all about debt. A large segment of the population (roughly 30 million by some estimates) is now, or will soon be, under water on their homes. That is wealth turned into debt instantly. You can’t borrow from your home (MEW) or even use it as collateral if it is not worth what you owe on it. Homes have now become no different than a car in terms of an investment. They are now a depreciating asset and should be viewed as such. When you trade your car in if you owe more than it is worth then you must pay the difference or tack it onto the new loan if you qualify to do so. The same thing is going on with housing right now, which is why lenders are finding it so tough to re-write mortgages for folks. They simply do not qualify for the new loan at the higher cost and in many cases they don’t even currently qualify for the original loan. These folks just simply cannot be saved by anyone and to try will only put off the inevitable. That is why we see so many defaults already on re-written loans from even earlier this year. Resets are another huge issue yet to really take place like it is about too. Sure we had subprime loans defaulting in record numbers, but they are not nearly as large of loans and so the hit to lenders and the economy is not nearly as large as what is about to hit. Alt-A, Pay Option and Prime and Jumbo Prime loans are starting to see resets take place. Many of these loans were written with LTV reset ratios of 115% - 125% and those levels are being reached now on many of these loans. The peak of resets actually doesn’t take place until 2010 and ends around 2012. It won’t take that long however for many of these to reach their LTV kick in reset schedules. Many of these loans rush upwards by hundreds and even thousands of dollars per month. Many times it is clearly enough to make even the big boys rethink their up coming purchasing decisions. Until we get through the bulk of these resets nothing will really move in any large way. With virtually no real buyers and first time buyers looking at the much cheaper shadow inventory there is little to no movement in new and existing home sales. Why pay 400K for a ranch when you can get a colonial for 250K in foreclosure? Many people have just taken their homes off of the market as a result and are either waiting to default themselves or simply walking away. This is just adding more shadow inventory. Also the tightening of what lending does exist is keeping the buyer pool very small. In many instances lenders now require 10% - 20% down and a credit score of 700 plus. Also no more stated income as you must now prove you have the resources to [ay back the loan. Many would be buyers simply cannot meet these requirements. Things will only get tighter in terms of lending requirements. All in all I would anticipate a suckers rally to hit at some point soon and then a continued downward spiral for many more years. I think resets will probably move upward from the 2012 ending to most resetting by Q1 2011. Then I would anticipate a flat period of roughly 2-3 years followed by a gradual 1% - 3% rise in value, or traditional inflation adjusted home prices, over the next 20-30 years or more. I am looking at 2015-2017 for things to be back to normal and that doesn’t mean 2004. In other words a house is back to being just a home again. A place to live, eat, watch TV, garden, maintain and live in. Not an investment as it was never designed to be and not a way to get rich quick either. Those that did were part of a giant scheme that will not be repeating for many, many years from now if ever again…
    Posted by Boomtobust[/QUOTE]
     
  5. You have chosen to ignore posts from grglga. Show grglga's posts

    Re: When will real estate prices begin rising again?

    You wrote a great piece up until the end.  Real estate will be a great investment when and if the prices come down to a point where you can buy a property and rent it out with a good rate of return.  It is that simple.  Of course after a bubble markets usually overshoot to the down side,  if one buys in a market where there are no renters/no jobs one needs deep pockets.  You have to buy at a price that other owners cannot compete with you on rent.  They buy 2 bedroom units but you buy 3 bedroom units at the same price etc.  2 families in Lowell, MA dropped from 150k in 1987 to 10k in 1995.  By 2005 they were up to 250k to 300k.  Condo's in Stoneham went from 150k in 1987  to 40-50k in 1995 and then back up to over 200k in 2005.  You could have bought a condo for 50k rented it out for $850 a month.  .
     
  6. You have chosen to ignore posts from FinanceMike. Show FinanceMike's posts

    Re: When will real estate prices begin rising again?

    Hi all -

    First data on March activity, from NAR.  It's not good.

    "Regionally, existing-home sales in the Northeast fell 8.0 percent to an annual pace of 690,000 in March, and are 22.5 percent below a year ago. The median price in the Northeast was $231,700, down 18.4 percent from March 2008."

    http://www.realtor.org/press_room/news_releases/2009/04/march_ehs

    Not exactly a rosy start to the spring selling season....

    Good luck all!

    Finance Mike

    EDIT: Smokey hokes!  I just re-read their release - is it really saying that there were fewer sales in March 2009 as compared to February 2009????  I was assuming they'd adjusted for trend and that March was just less of an improvement than usual over February.  Wow.
     
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  8. You have chosen to ignore posts from RealEstateMaven. Show RealEstateMaven's posts

    What was this finance mike smoking?


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  9. You have chosen to ignore posts from RealEstateMaven. Show RealEstateMaven's posts

    Things looking up!

    FHFA home price up 1.7% YTD 



    U.S. home prices rose in February for the second straight month, according to the Federal Housing Finance Agency index released Wednesday. Prices rose a seasonally adjusted 0.7% in February after a revised 1% increase in January, the agency said. Prices rose in six of nine regions in February, led by a 3.8% gain in the Northeast region
     
  10. You have chosen to ignore posts from anaplanet. Show anaplanet's posts

    Re: When will real estate prices begin rising again?

    People you really have to get out physically in the market. I just went with a friend of  mind and a realtor to see some single family homes between Hyde Park and Roslindale. My frined doesn't want to pay more than $280k. Everything we saw were dumps and needed at least a minim of $75K worth of work. In the boston area in quality locations, bargains are few and far between.
     
  11. You have chosen to ignore posts from Tachikoma. Show Tachikoma's posts

    Re: Things looking up!

    [QUOTE]FHFA home price up 1.7% YTD [/QUOTE]

    RealEstateMaven, don't forget to post actual URLs to the articles you are quoting. There is much more interesting info in those articles than you care to post on the board:

    -------------------------------------------------------------------------


    http://www.bloomberg.com/apps/news?pid=20601103&sid=agJmiOjZKbwk&refer=news

    "The continued deterioration in the U.S. job market means that any rebound in housing is unlikely until late this year or 2010, analysts said. The Labor Department’s report showed that the number of Americans continuing to collect unemployment insurance climbed to 6.14 million in the week that ended April 11, the 12th straight all-time high.

    ...

    From a year before, existing home sales were down 7.1 percent in March. Distressed properties accounted for about 50 percent of all home resales last month, the group said, up from about 45 percent in previous months.

    ...

    The median price slumped 12 percent from March 2008, to $175,200

    ..

    Resales of single-family homes decreased 2.8 percent to an annual rate of 4.1 million. Sales of condos and co-ops dropped 4.1 percent to a 470,000 rate.

    The decrease in total sales last month was led by an 8 percent slump in the Northeast.

    ...

    A weak job market is one reason economists project foreclosures will keep rising as unemployed owners fall behind on mortgage payments. A total of 803,489 properties received a default or auction notice or were seized in the first quarter, the highest since records began four years ago, said RealtyTrac Inc., an Irvine, California-based seller of mortgage data.

    ...

    The gain in distressed properties may be hurting sales of new homes.

    ...

    “The housing market continued its downward trend throughout our first quarter,” Lennar Chief Executive Officer Stuart Miller said in a statement. “Despite historically low interest rates and some indicators pointing toward market stabilization, low consumer confidence, increased unemployment and growing foreclosure rates negatively impacted new home sales in most of our markets.”

     
  12. You have chosen to ignore posts from foxmi2. Show foxmi2's posts

    Re: When will real estate prices begin rising again?

    What does it mean when I look at home's sale history and the last sale, usually within the past 2-3 years, was for $1?  Does that indicate foreclosure?  Does that indicate the owner passed away and the estate was transferred to the next of kin?  While I only came across this occasionally months and years back, I'd say 3 or 4 out of every 10 homes I look at now have this.
     
  13. You have chosen to ignore posts from RealEstateMaven. Show RealEstateMaven's posts

    Real estate prices are rising again!

    U.S. home inventories plumme

     The supply of unsold new U.S. homes plummeted in March in the biggest drop in more than 45 years, government data showed on Friday, indicating the housing market is bouncing back.

    Inventory levels have plunged a record 33.7 percent since March 2008, and the supply of homes available for sale shrank to 10.7 months' worth in March from February's 11.2 months.

    March  home sales zoomed to a 356,000 annual pace. Analysts polled by Reuters had forecast sales at a much slower 340,000.

    Sammy
     
  14. You have chosen to ignore posts from RealEstateMaven. Show RealEstateMaven's posts

    Rates Down, Sales Up

    Rates Down, Sales Up

     

    Fixed mortgage rates in the U.S. fell for a second consecutive week as the Federal Reserve plan to buy mortgage-backed securities helped drive rates lower.

    The rate for a 30-year fixed home loan declined to 4.80 percent from 4.82 percent a week earlier, Freddie Mac, the McLean, Virginia-based mortgage buyer, said today. The 15-year fixed rate was unchanged at 4.48 percent.

    The Fed said on March 18 it would purchase as much as $750 billion of additional mortgage-backed securities from Fannie Mae, Freddie Mac and Ginnie Mae. The program helped lower rates earlier this month to 4.78 percent, a record low in Freddie Mac data going back to 1971.

    “The policy is working,” said Labia Majoras, partner of Mons Pubis in Intercourse, Pennsylvania. “Mortgage interest rates are falling to a record low. That will stimulate some buying of homes. Sales of previously owned U.S. homes jumped by the most in more than five years.”

     
  15. You have chosen to ignore posts from RealEstateMaven. Show RealEstateMaven's posts

    Real estate prices are rising again!

    U.S. home inventories plumme

     The supply of unsold new U.S. homes plummeted in March in the biggest drop in more than 45 years, government data showed on Friday, indicating the housing market is bouncing back.

    Inventory levels have plunged a record 33.7 percent since March 2008, and the supply of homes available for sale shrank to 10.7 months' worth in March from February's 11.2 months.

    March  home sales zoomed to a 356,000 annual pace. Analysts polled by Reuters had forecast sales at a much slower 340,000.

    Sammy
     
  16. You have chosen to ignore posts from RealEstateMaven. Show RealEstateMaven's posts

    Real estate prices are rising again!

    FHFA home price up 1.7% YTD 


    U.S. home prices rose in February for the second straight month, according to the Federal Housing Finance Agency index released Wednesday. Prices rose a seasonally adjusted 0.7% in February after a revised 1% increase in January, the agency said. Prices rose in six of nine regions in February, led by a 3.8% gain in the Northeast region

     
  17. You have chosen to ignore posts from RealEstateMaven. Show RealEstateMaven's posts

    Real estate prices are rising again!

    Rates Down, Sales Up

     

    Fixed mortgage rates in the U.S. fell for a second consecutive week as the Federal Reserve plan to buy mortgage-backed securities helped drive rates lower.

    The rate for a 30-year fixed home loan declined to 4.80 percent from 4.82 percent a week earlier, Freddie Mac, the McLean, Virginia-based mortgage buyer, said today. The 15-year fixed rate was unchanged at 4.48 percent.

    The Fed said on March 18 it would purchase as much as $750 billion of additional mortgage-backed securities from Fannie Mae, Freddie Mac and Ginnie Mae. The program helped lower rates earlier this month to 4.78 percent, a record low in Freddie Mac data going back to 1971.

    “The policy is working,” said Labia Majoras, partner of Mons Pubis in Intercourse, Pennsylvania. “Mortgage interest rates are falling to a record low. That will stimulate some buying of homes. Sales of previously owned U.S. homes jumped by the most in more than five years.”


     
  18. You have chosen to ignore posts from RealEstateMaven. Show RealEstateMaven's posts

    You been a busy little boy. When to you find time to lose client money?


    While they have avoided the opprobrium heaped on bankers during the bear market, traditional active fund managers have quietly been proving that they too are often highly paid destroyers of value.

     

    Active managers have few bushes left to hide behind, and the release of a new report from Standard & Poor’s uproots one of the few left: that somehow they provide protection during down markets, being able to go into cash and defensive stocks.

     

    Check out the study for the gory details but the takeaway is that across styles and markets the majority of active fund managers, often the vast majority, simply can’t manage money well enough to make up for their own costs and the costs of all of those trades.

     

    Over the five year market cycle 2004-2008, the S&P 500 outperformed 71.9 percent of actively managed large cap funds and most active funds in each of the nine U.S. domestic equity style boxes were outperformed by indices during the disaster of 2008.

     

    At least casinos offer free drinks and valet parking.

     

    Beyond tighter regulation and controls on leverage, a good outcome from the current morass would be a fundamental re-think by holders of capital about what exactly it is they are paying for from investment managers. Diversification? Not really, with so many closet index funds out there.

     

    And spare me the argument that active managers earn their keep by holding company management’s feet to the fire. With precious few exceptions, this simply is not happening and arguably is a common good which individual investors are unwilling to pay for.

     

    Most individual investors would likely be better off paying an annual fee for an asset allocation check-up and simply putting the advice to use via ETFs or index funds.

     
  19. You have chosen to ignore posts from RealEstateMaven. Show RealEstateMaven's posts

    I lost my clients a pile of money this big...


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  20. You have chosen to ignore posts from RealEstateMaven. Show RealEstateMaven's posts

    Hell Jimmy, that's nothing. I cost the country $500 Billion


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  21. You have chosen to ignore posts from RealEstateMaven. Show RealEstateMaven's posts

    It's easy to steal from strangers, I stole $50 Billion from friends and family.


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  22. You have chosen to ignore posts from beedee. Show beedee's posts

    Re: When will real estate prices begin rising again?

    First, I've noticed a sudden increase in asking prices in some of the supposed "teflon" neighborhoods in the past couple of weeks. It's as if sellers in these neighborhoods suddenly think it's the peak of the market again. Time will tell if they get what they want. I've given up trying to predict what will happen in these neighborhoods. We are cautiously looking again and our agent tells us properties seem to be going under agreement quickly again. Which brings me to my other question:

    What does the Buyer's agent contract bind you to? If we found a house, did all the legwork on it, and the agent simply unlocked the door for a visit, do we have to stick with him if we're worried he's incompetent? Can we switch to another agent and have them put in our offer, or does signing the contract and viewing a property mean you have to use that agent for the offer?
     
  23. You have chosen to ignore posts from RealEstateMaven. Show RealEstateMaven's posts

    Real estate prices are rising again!

    Homes in California Are Selling !!!

    California's sales of existing single-family homes increasing 64% from the prior-year period and median home prices rising month-to-month for the first time since August 2007.

    California's inventory of unsold homes in March fell to a three-year low of five months, according to a report released Monday by the California Association of Realtors. That compares with 12.2 months of inventory the group reported for March 2008.

    The state saw sales of 522,980 existing single-family homes in March, compared with 319,290 in the year-earlier period, the report said. The March median price of $253,000 was up from $247,590 in February 2009 .

    Stimulus efforts helped the state's home sales in the month, said Delores Conway, a professor at the University of Southern California's Marshall School of Business. Some Californians benefited from about $8,000 in credit for first-time home buyers from the federal economic-stimulus plan, and some from an additional $10,000 credit from a state stimulus measure. Depressed prices of houses are luring first-time buyers, she added.

     
  24. You have chosen to ignore posts from RealEstateMaven. Show RealEstateMaven's posts

    Pace of decline slows to a record slowness

    Pace of decline slows to a record !!

    Prices of U.S. single-family homes fell slightly in February from a year earlier but the rapid pace of decline slowed, indicating the housing market is at a bottom, according to Standard & Poor's/Case-Shiller Home Price Indices released on Tuesday.

    For the first time in 16 months, the annual decline of the 10-city and 20-city composites did not set a record.

    "While the declines in residential real estate continued into February, we witnessed some deceleration in the rate of decline in some of the markets,'' David M. Blitzer, Chairman of the Index Committee at Standard & Poor's, said in a statement.

     
  25. You have chosen to ignore posts from RealEstateMaven. Show RealEstateMaven's posts

    Re: When will real estate prices begin rising again?

    Boston Real Estate Bastion of Stability

     Here are the price declines in each of the 20 cities over the past year.  Eat your heart out Boom2Bust!

    Phoenix, down 35.2%; Las Vegas, down 31.7%; San Francisco, down 31%; Miami, down 29.5%; Los Angeles, down 24.1%; Detroit, down 23.6%; Tampa, down 23%; San Diego, down 22.9%; Minneapolis, down 20.3%; Washington, down 19.2%; Chicago, down 17.6%: Seattle, down 15.4%; Atlanta, down 15.3%; Portland, down 14.4%; New York, down 10.2%; Charlotte, down 9.4%; Cleveland, down 8.5%; Boston, down 7.2%; Denver, down 5.7%; and Dallas, down 4.5% 
     

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