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Is Housing the Next Bubble?

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Jan 16, 2002
It's the next bubble BIG TIME, we are looking at a 20% to 30% appreciation per year, and the real estate agents are jumping list prices 20% on each new listing WITHOUT any sold properties to justify such an increase ! It's got to burst. Yesterday, a homeowner rejected an already accepted offer ($270,000), because the identical house next door was listed at $340,000 !!!!! She called real estate agent and agent said "we expect it to sell without any problem" - they are all insane !
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Say anything, do anything to keep that listing in stock! Don't want it have someone elses sign in front of it!
 

jtrotta

Senior Member
Joined
Jan 16, 2002
incredable; the last few agents I spoke with noted for the first time in many years, you can't even find a Condo. to buy and that has added to the single family shortage. Buyers are lookin all over, but there are limited available homes. SOme of the older houses in our area are now being priced well over 30% above market and this will add to the high probability of not being able to support those sales if, they do happen.

Just a thought, when all the players left the market and decided to come play in Real Estate again, it has definitely brought havoc to a new. Just got back from my favorite Island, and noted that housing there is at an all time high; houses are in the $450,000 + range, with the majority at over $1,000,000 - which was the 2-3 year back purchase's @ $300,000 to $500,000 - now comming back to the market.

Think, uh oh is a potential word 8)
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
An interesting little story that corresponds to this topic....
One of my friends who has been an appraiser in this area for years was invited to attend the monthly meeting of one of the biggest real estate companies here. They wanted to hear his opinion on what he thinks the market will be doing next. Typically at this time of year there is a glut of homes on the market and when spring finally comes they sell relatively quickly. My appraiser buddy said that the overall consensus among the realtors was that they should gather up as many listings as possible because this spring is going to be the best one ever.
The appraiser refused to join in the hooplah, knowing full well that people are still being laid off at an alarming rate in the Denver area, that the lenders are getting much tighter with their money, and that fewer than the normal number of homes have sold over the winter months than in previous years. Added to that is that the majority of the realtors weren't in the business back when the economy was horrible in this area (80's and early 90's), and it's a forumula for disaster.
My friend has a few opinions, but like any wise appraiser put into this position, he decided to keep them to himself. As appraisers we are expected to have a crystal ball and have omnipotent wisdom as to where the market is going next, but the slightest suggestion that everything might not be coming up roses makes you the turd in the punchbowl.
 

Ross (CO)

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Oh, the new season for home pricing and listing is upon us. Much is linked no doubt to post Sept. 11 aftermath and the fact that winter officially ends today. Like bears hibernating in their winter dens, the sales-folk are now emerging and anxious for another round of wishful-hopeful-maybe. I recently did a mountain home in a rustic setting where sales and pricing have been stale since Sept. 12th. Lots of vacation and summer weekend hide-away properties. I had three good comps and an adjusted range of 220-225. After submitting report few weeks later I was called by client and asked to re-consider my value and was offered 3 other comps of sales happening 11, 8 and 7 months prior to my DRIVE-BY observatioin of subject (that's right, we do not want you to go inside the place). Two of the three were of NEW construction, where the biggest hit of the price / value dis-connect occurs. The icing on the cake was a brief note from an area Realtor, passed along to me. It stated that "he would list the place (subject) for $285K today"......and I was supposed to put all that rubbish in the hopper and grind out a value "around $275, maybe, huh, could 'ya, maybe...". Just one example of the desparate times experienced by some, and the appraiser will be the whipping post upon which their frustrations are vented. Just one example of several recent ones. Yes, I admit, it is time to launch a new round of marketing as disappointed clients, who do not understand our process or our standards or our marketplaces, will seek new appraisers who will bend , flex and wear the rose-colored glasses.
 
Joined
Jan 16, 2002
Dee Dee:

I like your use of imagery, i.e. your reference to the punchbowl.
That must be how real estate agents see me.

Regards,

Ranting Joe
 

Dale Smalley

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Florida
The south FLa market is so hot that the Realtors are getting most of their deals killed at the appraisal. I have seen several offers on average SF above listing when you know it wont appraise near that value. It has been estimated that there is a 25% reduction in active listings creating a much higher demand. So it seems like this method of appraising is keeping the values from getting out of hand. Sellers are going to have to give a second if they want the higher prices. But when the housing market slows down will they call it a correction in value or a bust?
 

Larry Lyke

Senior Member
Joined
Feb 2, 2002
Sounds like Dee Dee not only has omnipotent wisdom, I also detect a little prescience about things less than buoyant -- whether it be market values or detritus that doesn't float.

[EXIT STAGE LEFT]

Right? Yup.
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Larry Lyke [MN] said:
Sounds like Dee Dee not only has omnipotent wisdom, I also detect a little prescience about things less than buoyant -- whether it be market values or detritus that doesn't float.

[EXIT STAGE LEFT]

Right? Yup.
Only in my dreams, Larry. The more I figure out in life the more I realize that I don't know enough about something else. Wish I was young again...that's when I knew everything. :wink:
 
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