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Housing Bubble Bursting?
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Randolph Kinney
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NAR: Incentives May Have Affected Value
http://narblog1.realtors.org/mvtype/appraisers/2006/12/incentives_may_end_up_costing.html
So why don't the Realtors include the incentives and concessions in the MLS, post sale? Oh, it makes it harder for appraisers to know what the real market value was and keeps prices up.
http://narblog1.realtors.org/mvtype/appraisers/2006/12/incentives_may_end_up_costing.html
So why don't the Realtors include the incentives and concessions in the MLS, post sale? Oh, it makes it harder for appraisers to know what the real market value was and keeps prices up.
Randolph Kinney
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Long a Laggard, Wages Start to Outpace Prices
http://www.nytimes.com/2006/12/08/business/08wage.html?_r=1&th&emc=th&oref=slogin
After four years in which pay failed to keep pace with price increases, wages for most American workers have begun rising significantly faster than inflation.
The average hourly wage for workers below management level — everyone from school bus drivers to stockbrokers — rose 2.8 percent from October 2005 to October of this year, after being adjusted for inflation, according to the Bureau of Labor Statistics. Only a year ago, it was falling by 1.5 percent.
Wages have risen so swiftly that some economists worry that they could push inflation up on their own, by forcing companies to raise prices. Last week, the Federal Reserve chairman, Ben S. Bernanke, warned that the central bank might have to raise interest rates again. “One factor that we are watching carefully is labor costs,” he said.
http://www.nytimes.com/2006/12/08/business/08wage.html?_r=1&th&emc=th&oref=slogin
After four years in which pay failed to keep pace with price increases, wages for most American workers have begun rising significantly faster than inflation.
The average hourly wage for workers below management level — everyone from school bus drivers to stockbrokers — rose 2.8 percent from October 2005 to October of this year, after being adjusted for inflation, according to the Bureau of Labor Statistics. Only a year ago, it was falling by 1.5 percent.
Wages have risen so swiftly that some economists worry that they could push inflation up on their own, by forcing companies to raise prices. Last week, the Federal Reserve chairman, Ben S. Bernanke, warned that the central bank might have to raise interest rates again. “One factor that we are watching carefully is labor costs,” he said.
moh malekpour
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Randolph Kinney
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Here's Hoping: That Bottom NAR Looks For
Greg Bell
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I wonder who pays this idiot , please don't send your kids to UCLA....
LOS ANGELES
December 7, 2006 6:19am
• Continuing decline in California real estate seen
• Housing woes alone not enough for a recession
The nation is not poised to plunge into recession says the fourth quarter UCLA Anderson Forecast issued Thursday.
It notes in particular that “manufacturing is not poised to contribute much to job loss” and “real interest rates are very low and there is no evident credit crunch, not on the horizon.”
The report says the decline in the housing sector will be isolated and, while a drag on the national economy, not enough to cause a recession during the forecast period.
The forecast for California is much the same, with a declining housing market slowing the economy, but without a secondary source of economic distress it’s not enough to cause a recession.
The decline in the housing sector is contributing to job loss in the construction sector, but there are no significant losses to be found on the manufacturing horizon and without the accompanying decline in manufacturing jobs, the losses in construction will not be enough to cause a recession, the report says.
“If you are a builder or a broker, it will feel like a deep depression,” says Edward Leamer, director of the Anderson Forecast. “But the rest of us will hardly notice.”
In the California report, UCLA Anderson Forecast economist Ryan Ratcliff echoes reports released earlier in 2006, writing that “slowing housing markets will create a significant slowdown in the California economy, but will not create a recession without a secondary source of weakness.”
The central message of the forecast remains unchanged -- the construction sector will continue to weaken, with total residential permit activity and construction employment hitting bottom in late 2007.
The report also looks closely at two potential sources for that additional weakness — a negative wealth effect and/or a state budget crisis — but concludes that neither will be severe enough “to create a recession.”
LOS ANGELES
December 7, 2006 6:19am
• Continuing decline in California real estate seen
• Housing woes alone not enough for a recession
The nation is not poised to plunge into recession says the fourth quarter UCLA Anderson Forecast issued Thursday.
It notes in particular that “manufacturing is not poised to contribute much to job loss” and “real interest rates are very low and there is no evident credit crunch, not on the horizon.”
The report says the decline in the housing sector will be isolated and, while a drag on the national economy, not enough to cause a recession during the forecast period.
The forecast for California is much the same, with a declining housing market slowing the economy, but without a secondary source of economic distress it’s not enough to cause a recession.
The decline in the housing sector is contributing to job loss in the construction sector, but there are no significant losses to be found on the manufacturing horizon and without the accompanying decline in manufacturing jobs, the losses in construction will not be enough to cause a recession, the report says.
“If you are a builder or a broker, it will feel like a deep depression,” says Edward Leamer, director of the Anderson Forecast. “But the rest of us will hardly notice.”
In the California report, UCLA Anderson Forecast economist Ryan Ratcliff echoes reports released earlier in 2006, writing that “slowing housing markets will create a significant slowdown in the California economy, but will not create a recession without a secondary source of weakness.”
The central message of the forecast remains unchanged -- the construction sector will continue to weaken, with total residential permit activity and construction employment hitting bottom in late 2007.
The report also looks closely at two potential sources for that additional weakness — a negative wealth effect and/or a state budget crisis — but concludes that neither will be severe enough “to create a recession.”
moh malekpour
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http://biz.yahoo.com/ap/061208/foreclosures.html?.v=1
AP
Texas, Michigan Lead in Foreclosures
Friday December 8, 3:57 pm ET
Texas and Michigan Led the Nation in New Foreclosures in November
NEW YORK (AP) -- Texas led the nation in the number of new foreclosures in November, followed by Michigan, according to Foreclosure.com.
In Texas, 3,031 units were foreclosed and put up for sale in November. A total of 9,648 foreclosed units are on the market in the state, the second-highest number in the nation. In Michigan, 2,430 units were foreclosed and put up for sale in November. A total of 10,641 foreclosed units are on the market in Michigan, the most of any state, according to Foreclosure.com.
Nationally, foreclosures are up because of rising interest rates, but in Michigan, foreclosures have increased as the economy has faltered and workers have lost their jobs, said Brad R. Geisen, co-founder of Foreclosurefreesearch, Inc., parent company of Forclosure.com.
Ohio, Georgia, Indiana and Colorado all had more than 1,000 homes go into foreclosure in November, according to the Web site. Ohio's number of foreclosed homes for sale, 9,234, is the nation's third largest.
AP
Texas, Michigan Lead in Foreclosures
Friday December 8, 3:57 pm ET
Texas and Michigan Led the Nation in New Foreclosures in November
NEW YORK (AP) -- Texas led the nation in the number of new foreclosures in November, followed by Michigan, according to Foreclosure.com.
In Texas, 3,031 units were foreclosed and put up for sale in November. A total of 9,648 foreclosed units are on the market in the state, the second-highest number in the nation. In Michigan, 2,430 units were foreclosed and put up for sale in November. A total of 10,641 foreclosed units are on the market in Michigan, the most of any state, according to Foreclosure.com.
Nationally, foreclosures are up because of rising interest rates, but in Michigan, foreclosures have increased as the economy has faltered and workers have lost their jobs, said Brad R. Geisen, co-founder of Foreclosurefreesearch, Inc., parent company of Forclosure.com.
Ohio, Georgia, Indiana and Colorado all had more than 1,000 homes go into foreclosure in November, according to the Web site. Ohio's number of foreclosed homes for sale, 9,234, is the nation's third largest.
Randolph Kinney
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They have not considered, what if any, affects of the new global warming law passed in California this year. It requires all California businesses to reduce their emissions of greenhouse gases.
Ninety one percent of businesses that were surveyed said that California should develop a cap and trade program in order to meet the requirements of the Global Warming Solutions Act which was signed by Governor Schwarzenegger in September. The act requires Californians to reduce GHG emissions up to 25% by 2020. The survey also underscored that a significant amount of uncertainty currently exists among California businesses about how the GHG law will be executed.
In 2004, California added carbon dioxide to its list of regulated tailpipe emissions. The state requires a 30 percent reduction in carbon dioxide emissions by 2016.
California's drive to lead the nation in the fight against carbon dioxide emissions - and thus global warming - may soon rest in the hands of one very powerful native of the Golden State: Supreme Court Justice Anthony Kennedy. Oral arguments in an important case last week suggested that four justices on the court are inclined to order the U.S. Environmental Protection Agency to regulate greenhouse gas emissions, or at least to allow a lawsuit to go forward that could force the agency to acknowledge that it has the authority to jump into the global warming issue.
If there is no corresponding Federal requirement of CO2 emissions by business, California will have an exit migration of businesses to states that have no or less of a requirement regulating emissions. Of course, Mexico is always an option because they have no clean air laws.
Greg Bell
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Some info for all the "Home sales are up" , realitiy check is due..
Houses for Sale That Don't Exist in the Statistics
Lennar, the #3 homebuilding firm, said the cancellation rates for home sales were running about 30% last quarter. KB Homes said the number was 43%. A lot of anecdotal stories suggest the numbers could get worse. So that would add homes back into the Homes for Sale statistics that the Commerce Department (Census Bureau) tracks, wouldn't it?
The simple answer is no. The Census Bureau surveys home builders and specific housing starts. If a home is built and at some point put under contract for sale, it is then considered sold. The Census Bureau does not go back a few months later and ask, "Did you really sell that house?"
Because of the way they do the survey, they do not double count if the home sells at some later point to another person. One house, one vote. In the long run, cancellations do not cause the system to either overestimate or underestimate the number of houses sold.
But in the short run? As their web site explains: "As a result of our methodology, if conditions are worsening in the marketplace and cancellations are high, sales would be temporarily overestimated."
So the recent data that shows new home sales as possibly, maybe, getting to a bottom of the cycle? With north of 30% cancellations, the number of actual sales is certainly less than the data is showing.
Houses for Sale That Don't Exist in the Statistics
Lennar, the #3 homebuilding firm, said the cancellation rates for home sales were running about 30% last quarter. KB Homes said the number was 43%. A lot of anecdotal stories suggest the numbers could get worse. So that would add homes back into the Homes for Sale statistics that the Commerce Department (Census Bureau) tracks, wouldn't it?
The simple answer is no. The Census Bureau surveys home builders and specific housing starts. If a home is built and at some point put under contract for sale, it is then considered sold. The Census Bureau does not go back a few months later and ask, "Did you really sell that house?"
Because of the way they do the survey, they do not double count if the home sells at some later point to another person. One house, one vote. In the long run, cancellations do not cause the system to either overestimate or underestimate the number of houses sold.
But in the short run? As their web site explains: "As a result of our methodology, if conditions are worsening in the marketplace and cancellations are high, sales would be temporarily overestimated."
So the recent data that shows new home sales as possibly, maybe, getting to a bottom of the cycle? With north of 30% cancellations, the number of actual sales is certainly less than the data is showing.
Couch Potato
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Undercounted later.
It is best to just take the statistics for what they are, an indicator of what's going on. None of them are perfect and if you do your work properly you will know what is going on in your particular market long before any statistics about it are released. A couple of weeks ago some government statistician released a conclusion that the sharp rise in housing prices seemed to have ended in August/September of 2005; to which I thought DUH! I started putting language to that effect in my reports in September/October of 2005. Appraisers can't wait on others to tell them what is going on in the market if they are going to do a competent job.
While the initial rise in cancellations causes an over-count of sales, a corresponding under-count of sales will occur as those houses actually sell. The stats could show they sold 100 in October and 50 in November, but real sales could easily be going up if 30 were cancelled in October and actually sold in November.Greg Bell said:
It is best to just take the statistics for what they are, an indicator of what's going on. None of them are perfect and if you do your work properly you will know what is going on in your particular market long before any statistics about it are released. A couple of weeks ago some government statistician released a conclusion that the sharp rise in housing prices seemed to have ended in August/September of 2005; to which I thought DUH! I started putting language to that effect in my reports in September/October of 2005. Appraisers can't wait on others to tell them what is going on in the market if they are going to do a competent job.
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