Housing Bubble Bursting?

[JSmith43]

The MN market was not wound up so tight as FL & CA, so it is hard to relate.

I do subscribe to a FSBO activity monitoring service, and it shows FSBO activity drastically curtailed in November from October....more than a seasonal thing (my guess at this point).

Anecdotally, seasoned agents have told me about sobering price cuts for those that have to sell and quite a bit of listings taken off the market by those with flexibility in selling. The market seems to be working locally to clear excess inventory. Long term rates are all of a sudden, really sweet, which will help slow the sagging areas of the national housing market.

Too many things going well, sorry . If we develop raging inflation, high interest rates and a collapsing job market, I'll be in the bubble camp....for a few years

 

[Randolph Kinney]

Too many things going well, sorry . If we develop raging inflation, high interest rates and a collapsing job market, I'll be in the bubble camp....for a few years

Yep, the official NAR line, things are going swell. Nationally, 3 consecutive median home price declines year over year have occurred. If median price declines do not happen in Roger's market ... well it did not happen. CA and FL are exceptions but Brad will tell you they are not sufficient to pull down the nation as a whole. That means there was a shift in the median home price all around you Roger for 3 consecutive months.

Of course, we can look at the condo market for confirmation of the SFR market:

Sales of condos dropped 4.8% to 778,000. Median sales prices are down 5.3% in the past year to $214,300. Condo sales are down 14.5% in the past year. The inventory of unsold condos rose to 9.1 months.

"That's a segment of the marketplace that's experiencing some pain," Lereah said.

 

[JSmith43]

That means there was a shift in the median home price all around you Roger for 3 consecutive months.

+/-72 months up, 3 months down.....oh, the humanity

 

[Randolph Kinney]

+/-72 months up, 3 months down.....oh, the humanity

But wait ... it ain't over yet. As you said:

If we develop raging inflation, high interest rates and a collapsing job market, I'll be in the bubble camp....for a few years

My bold Roger. We have the best of times, long term 30 year mortgage interest rates have fallen, the unemployment rate has fallen, gas prices have fallen, etc.

So how come home prices are falling? And if they are falling now is the best of times, what happens when hard times come up us?

 

[Pamela Crowley (Florida)]

Basic Economics - Supply & Demand

With the huge numbers of speculators / investors snapping up new houses only to flip them for profit, even to each other, we had a very false demand.

This false demand created a major over-supply of residential properties, especially in new houses & condos.

Now that we're back to the vast majority of the buyers being those that actually want to live in their residential purchase, the demand is MUCH lower and the current over-supply will take quite a while to sell off.

Meanwhile... the builders don't know how to stop building, so the over-supply is still growing.

:Eyecrazy:

 

[Jozsef Poor]

Meanwhile... the builders don't know how to stop building, so the over-supply is still growing.


Miami built between 1995 to 2005 9,250 unit
2006 6,275 unit
Under construction 22,254 unit
Approved 29,558 unit
Waiting for approval 30,674 unit
(Public records city of Miami)

"current over-supply will take quite a while to sell off."

Yes. According to the city we have +- 80 ev supply to sell off, if all of the above will be constructed. ....doubt

 

[Greg Bell]

Home sales climbed .5 percent.All is well. Every talking head and economist
will tell us the worst is over.Thank God.Now I can go out and purchase some over priced shanty for $400K and flip for $500K.The economic goofballs may have to change under wear after this huge gain.Watch for all the idiotic
"Real Estate is back" rehtoric from all of the brilliant real estate gurus.

 

[Terrel L. Shields]

Hey, Rog...off topic, but did you give us a glowing tribute to your avitar..didn't he die a few days ago?...or are you really his evil twin?

Locally, I see people who have to sell, selling for less than they would have to have previously. Some are 'holdouts' but we still have enormous inventory on houses over $250K

 

[JSmith43]

Hey, Rog...off topic, but did you give us a glowing tribute to your avitar..didn't he die a few days ago?...or are you really his evil twin?

Locally, I see people who have to sell, selling for less than they would have to have previously. Some are 'holdouts' but we still have enormous inventory on houses over $250K

I do believe there are great psychological differences in various pockets of the country. For many years, it has been noticeable from comments by our appraisal friends in and around Detroit, as the "Big Three" keep....adjusting.

For decades, I have witnessed such an attitude displayed in MN by "evacuees" from the Iron range areas of Northern MN as first, Iron Ore mining peaked & later as the Taconite industry petered.

We've all heard the joke about what a farmer would do if they won the lottery (keep farming until the money ran out). I think that the little bubbles and big bubbles that one experiences in the journey through life can shape the way we view such things.

As I recall, you lived through cyclical bubbles in local energy production For some here, they might just be reporting their first bubble. For the most part, and from my chair, it appears to be a typical economic down transition cycle for housing in MN. After the initial "attitude adjustment", the market clears, pauses and recovers

Edit: I forgot to mention the Appraisal profession bubble..... and, the LO bubble! )

 

[Brad Ellis]

Randolph,

Have not seen the final numbers from NAR and am off on a week trip.

But, the preliminary number from the midwest showed a decline of 4.*% - the largest drop in the country. That drop was caused mostly by MI, OH, and IN so not surprised that Roger has not seen a problem in MN.

Much of the midwest drop appears to be caused by the auto industry.

Interestingly, there was an article in the LA Times last Sunday that meausred price changes combining all types- including new home sales and it indicated price increases all over the place. I did not look up the study but it might be of interest to you.

On the coasts the biggest drops are in San Diego county and FL condos. No surprise there. Been saying that for a long time now.

Still, only 3.5% overall? Looks like a classic- and minor, if Greenspan and others are correct about us being at the bottom of the curve- correction.

And, for the record, I AM considering selling my house even at this bottom and moving closer to work where I can buy an alternative at the bottom. We'll have to see.

Brad