At The Bottom You Don’t Have Anywhere To Go But Up
Readers suggested a topic on the housing bubble. “Is the housing Bubble over yet, or is it only the fifth inning or so?”
A reply, “Over. I expect new bubbles though as the FED Bank runs the economy hot for maximum growth. I watch RE very closely in Moorpark CA every POS is selling and for almost 100K more than it did 8 months ago. WTF ?’
And this, “WT Payment There’s your answer. Housing is just one necessary product….Food & water is another. All around you, we see higher prices in the things we must have. Oil is another example. We had a S & L Bubble…Then we had a Dot-Com bubble….Then we had a Housing Bubble….The latest bubble that we find ourselves in now is a interest rate Bubble and, when it pops the fallout from it will be widespread across many product categories.”
One said, “Some markets in the USA have crashed, other have yet to feel the big crash. In the rest of the world, it is just barely past peak. In China you have 700 sqft condos selling for 70x median household income. In India’s big cities condos are selling for $300K, but the target audience is making $10K a year or less. In some Canadian cities, where income are $40K a year, you can’t buy a house for under $1 million.”
And finally, “There won’t be a peak in Rio de Janeiro. It is not the same here as other places in that we have the beach and mountains and there is no more space to build in the desirable sections. Also with all the oil being found offshore and the Olympics and World Cup coming, too many Brazilians want to live here. All of these factors have come together forming a different type of economic model than other areas. If you buy now, you’re going to make a lot of money here.”
The Gazette Journal. “‘What we noticed this time was that there was a variety of markets, and Reno being one of them, we considered boom towns,’ said Julie Reyolds, VP of Realtor.com. ‘What that means, it’s one of the (146 markets that we have been watching) that zoomed to significantly higher ranking, based on those key metrics.’”
The Press Enterprise. “Bill Blankenship, CEO of the Building Industry Association of Southern California’s Riverside County chapter, said a lack of housing supply is driving the market, as is the pricing. People are coming off the sidelines and builders are seeing more interest from a better qualified pool of buyers, he said, but there’s not a lot of supply out there.”
“‘There isn’t enough inventory, in a nutshell,’ agreed Doug Shepherd, immediate past president of Inland Valleys Association of Realtors, noting that the MLS has 8,000 fewer properties on the market now than one July ago when there were about 18,000 listings. ‘The inventory is way low,’ he said, and that’s pushing prices up. ‘The real story is how hard it’s become to buy a house right now.’”
The Tampa Bay Times. “Inventories across the country, steadily sliding since 2007, are now at a six-year low, National Association of Realtors data shows. Low inventory can lead to a seller’s market, including higher prices. After years of sinking values, that’s good news for sellers, some of whom have seen bidding wars. Squeezing the supply are homeowners waiting to list their homes, betting future price increases could net them a better deal, real estate agents said.”
“‘The people who had problems and had to sell, had to sell. But we’ve been in this down market for four years,’ said Century 21 franchise owner Craig Beggins. ‘People are saying, ‘Why on earth would somebody sell their house now?’”
“While Smith & Associates Realtor Liane Jamason typically carries a dozen active listings, she’s now down to zero and has struggled even to find a new home for herself. Many house hunters still think the market’s wide open with foreclosures, Jamason said, ‘but that’s not reality.’ ‘We still have buyers looking for the bottom. I told somebody today, you missed it,’ said Century 21 Realtor Jaci Stone.”
“When Lisa Gilmore-Sarnowski and her husband began shopping for their first home, they knew the mantra well: Now’s the time to buy. Having moved last year from Chicago, the couple believed Florida held, as Gilmore-Sarnowski said, ‘this amazing abundance of little gems’ tossed aside in the market crash. Their hunt quickly turned frustrating. Most homes they found were already under contract or outside their $150,000 price range. Their best find, a St. Petersburg bungalow, was practically falling apart.”
“‘Honestly, it feels like we’re a day late and a dollar short,’ said Gilmore-Sarnowski, 26, an interior designer whose husband, David Sarnowski, is a Tampa police officer. ‘All that’s left is leftovers.’”
“Rising prices could prompt reluctant homeowners to sell, and banks could increase the flow of repossessed homes, boosting the supply. But for Gilmore-Sarnowski, that could be too late. She and her husband plan to keep looking for a few months, but the slim pickings have them rethinking their search. ‘We’re to the point where we’re thinking,’ she said, ‘maybe we should find somewhere inexpensive to rent.’”
The Seaway News. “While national studies suggest the Canadian real estate market is cooling off, local property experts suggest Cornwall and area should fair pretty well. Steven Iwachniuk of Storm Realty in Cornwall said the city and area is fairly insulated from the forecast real estate price correction, because our property values aren’t inflated to begin with.”
“‘We’re already a lot lower than other areas of Canada,’ he said. ‘In time they’re going to feel the bubble.’”
“In the city of Toronto, 3,520 homes were sold in June, at an average price of $554,077. The Cornwall and District Real Estate Board could not readily provide sales figures for this area, but Iwachniuk said the average price of a home locally is about $160,000. ‘That makes homes very affordable,’ he said. ‘When you’re at the bottom as far as Ontario is concerned, you don’t have anywhere to go, but up.’”
“Ron Macdonell, owner of the local Property Guys franchise agreed while Cornwall should remain safe from wild price fluctuations that could be experienced in larger centres, the local market could use a shot in the arm. ‘Right now it’s kind of soft,’ he said, adding the Cornwall area market is benefitting buyers right now. ‘I’m hearing from some people in town that they are being pressured to lower their prices.’”
