16 replies to this topic

[OEXCHAOS]

I was thinking that we'd see a bounce out our way in realestate thanks to the wonderful weather. I figured we weren't that over done and that there was some pent-up demand that would be released as folks decided that they've waited long enough and the nesting bug bit. I'm not seeing much traffic or new sales at all, but I'm seeing plenty of development projects moving forward. That means more supply. If our experience out here is a guide, there's another shoe to fall on residential real estate. The panic sets in when things are expected to improve a bit and don't. I suspect that we need to see some real price deterioration. I think that there are a large number of folks selling homes out there who think that a profit is some sort of God-given right. They don't seem to grasp that the notion of supply and demand also applies to them. M

[SemiBizz]

It's all about LOCATION LOCATION LOCATION.

Price of Marin median single-family home tops $1 million

Housing slump? What housing slump?

The median price of a single-family home in Marin broke the $1 million barrier for the first time in April, shattering the previous record of $973,000, set in April 2006, according to DataQuick Information Systems, a La Jolla-based research firm. Marin was the first county in California to pass the $1 million median price.

In addition, Marin was the only county in the nine-county Bay Area where sales of detached homes increased from April 2006 to April 2007. Marin homeowners sold 254 detached houses last month, up from 250 the previous April - while the Bay Area overall posted a 20 percent decline in sales.


Meanwhile, condo prices in Marin showed double-digit growth while most counties saw prices decline or post modest increases. The median condo price in Marin was $640,000 last month, up 19 percent from $537,000 in April 2006.

Edited by SemiBizz, 21 May 2007 - 08:49 AM.

[chris]

Besides IYR, here's the Ultra Short Real Estate ProShares (SRS) {for anyone who may not be aware of it).

http://ichart.financ...26-12-9,r14.png

[Data]

You can still have a rise in the median price of homes resold in your area even if the price of homes are dropping. Newer and more expensive homes are entering the resale market over time. In Great Falls, Va, homes built since 2000 cost on the average 40 percent more than the older homes.

[SemiBizz]

You can still have a rise in the median price of homes resold in your area even if the price
of homes are dropping. Newer and more expensive homes are entering the resale market
over time. In Great Falls, Va, homes built since 2000 cost on the average 40 percent more
than the older homes.

Well, that does not apply here - there is very little new construction going on. This is an establilshed poliitcally-left, environmentally-sensitive community with tight regulation of building permits. In fact during a drought we had in the 80s, there were no new water hookups for about 7 years....



What you say may be true for other parts of the country. Location does make a difference.

[Data]

You can still have a rise in the median price of homes resold in your area even if the price
of homes are dropping. Newer and more expensive homes are entering the resale market
over time. In Great Falls, Va, homes built since 2000 cost on the average 40 percent more
than the older homes.

Well, that does not apply here - there is very little new construction going on. This is an establilshed poliitcally-left, environmentally-sensitive community with tight regulation of building permits. In fact during a drought we had in the 80s, there were no new water hookups for about 7 years....



What you say may be true for other parts of the country. Location does make a difference.

Teardowns and significant remodels may have the same effect in a mature area.

The mix of homes being sold is distorting the median price of homes being sold.

http://marinrealesta...e.blogspot.com/

[OEXCHAOS]

What I'm sayin' is in this area, sales are dead. Things could be different elsewhere. I'm seeing properties getting one or two showings and then nuttin'. Dropped price 5%...still nuttin'. This is for fairly nice urban and semi-urban homes, and sellers who are making good money. I'm also seeing some delusional prices, as well. Folks are goofy. Paint won't make engineering problems go away, and yet I'm seeing homes with problems priced like they're pristine. I'm seeing jake-leg work being priced like it's high quality craftsmanship, too. Not everywhere, but all too often. Meanwhile, some really nice properties, properly priced, aren't moving either. I had really thought to see at least activity increasing, but thus far, not so much. I can't speak to real suburban properties. Things may be vastly different. M P.S. I'm also thinking that this will be Bullish for stocks. Lower interest rates.

[atlasshrugged]

Besides IYR, here's the Ultra Short Real Estate ProShares (SRS) {for anyone who may not be aware of it).

http://ichart.financ...26-12-9,r14.png

thanks chris

[Cirrus]

I was thinking that we'd see a bounce out our way in realestate thanks to the wonderful weather. I figured we weren't that over done and that there was some pent-up demand that would be released as folks decided that they've waited long enough and the nesting bug bit.

I'm not seeing much traffic or new sales at all, but I'm seeing plenty of development projects moving forward. That means more supply.

If our experience out here is a guide, there's another shoe to fall on residential real estate. The panic sets in when things are expected to improve a bit and don't. I suspect that we need to see some real price deterioration. I think that there are a large number of folks selling homes out there who think that a profit is some sort of God-given right. They don't seem to grasp that the notion of supply and demand also applies to them.

M

I've been following the Richmond, VA market for more than two years. I see the same thing going on here--and I can't believe it. I am planning on buying this summer (after waiting 2 years for a buyers market) so I'm following the market somewhat closely. However, listings have ballooned in the past two months from previously ridiculously high levels. I thought listings were beyond plentiful four or five months ago but now they are insane--and the builders are still building. I was one who was mildly pessimistic on the residential RE market but I've grown more so as there has been no adjustment.

Yesterday I walked into an upper middle class type development of a couple hundred homes or so (development is just 3 or 4 months old) near my rental to continue to gauge the market. I was shocked at what I saw......

First, they are building these homes on a large land holding that borders a major interestate. That in itself is a surprise as I can't believe an idiot would be willing to spend between 425-525k on a 3200 sqft box to listen to semis drive through their back yard at 3AM--and the interestate is literally their back yard. What I saw next blew me away. The lots bordering the interestate were sold out!!!! These were about 10% of the lots. There were virtually no other sales of the 'better' lots. The agent joined me in expressing complete amazement of this fact. I then realized that these lots were only about 20k to 25k cheaper than the better lots. I came to the conclusion that affordability is perhaps the most important issue for the market. People still want to spend all they can to buy the biggest 'baddest' home possible. Psychology still hasn't adjusted. This is obviously clouding their judgement on true value and sense in a major way. I wouldn't even buy the development because the furthest homes from the interstate were too close for me. There is NO shortage of land to build on in the area and in Richmond. These people in the suburbs close to the interestate will always have to compete with builders for years to come--available land is not a limiting factor. The stupidity of the average American is amazing.

Supposedly the Richmond market is one of the strongest on the Atlantic seaboard. If this is a reasonably strong market what is it like in the weak markets? I do have a contact or two that's actively involved in SFL residential RE. There things are plenty bad. Nothing moves unless its heavily discounted. I look at the major builders (LEN, PHM, BZH, etc)--balance sheets, earnings and projected earnings and way those stocks/their valuation with my observations and data. These stocks are trading as if a large recovery is 6 months to a year out and earning will be on par to those a year or so below the peak. Maybe The Street is drunk on bull juice. Marks RE shoe mentioned above may end up being a boot. Then again, Americans will keep spending on homes, stocks and stuff until there is no money left in the account or no lender willing to lend. If that doesn't happen a limiting factor will arrive. I suspect that factor will eventually be the prices of the goods they want are higher than their ability to spend or borrow.

As I type though the trend is up--the trend is your friend...until it ends.

[SemiBizz]

Just spoke with a friend here who put his home on the market last week. Has 3 offers already around $1.7M. I took a hard look at the US$ Index chart this weekend. All that's happened there is a lower high so far. Fundamentally, either the commodity prices are either going to come down or we're going to have huge asset and equity inflation including R.E..

Edited by SemiBizz, 21 May 2007 - 11:44 AM.