Is the real estate bubble bursting, or just losing steam?

USA Today story on 12-30-05 says the number of previously owned homes on
the market rose in November to the highest level in 19 years, while
sales fell for the second consecutive month, raising concerns that a
housing bubble might be about to burst. More than 2.9 million homes
were on the market in the USA in November, the National Assn of Realtors
said. That was up 14.3% from November 2004, and the highest level since
April 1986. Prices also declined, down 1.4% from the prior month.

Is the market in for a true crash, or will it bottom out more slowly?
Does anyone think that real estate, even in hot markets, will continue
to appreciate in 2006? What's your opinion on where we're headed? Mr P

Re: Is the real estate bubble bursting, or just losing steam?

There is no bubble that was just a spike and pull back because of
winter coming.The property prices are going up for 10 more years as it
seems like we now have a system that feeds itself by generating equity
for more expansion.Spring looks really good now that there is some
property to sell by the shake out.3 months ago I had five deals fall
through because the sellers thought that they were leaving money on the
table.Now these guys would be glad to get what they were getting then

Re: Is the real estate bubble bursting, or just losing steam?

"Mr P" <> wrote in message
news:
> USA Today story on 12-30-05 says the number of previously owned homes on
> the market rose in November to the highest level in 19 years, while
> sales fell for the second consecutive month, raising concerns that a
> housing bubble might be about to burst. More than 2.9 million homes
> were on the market in the USA in November, the National Assn of Realtors
> said. That was up 14.3% from November 2004, and the highest level since
> April 1986. Prices also declined, down 1.4% from the prior month.
>
> Is the market in for a true crash, or will it bottom out more slowly?
> Does anyone think that real estate, even in hot markets, will continue
> to appreciate in 2006? What's your opinion on where we're headed? Mr P

Yes, there are many markets where the inventory levels or available houses
on the market are so low and in these markets prices will go up in 2006.
California has many areas including the San Francisco Bay Area, Silicon
Valley where prices increases are expected.



>

Re: Is the real estate bubble bursting, or just losing steam?

You will mostly find opinions that their is no bubble in this newsgroup
becuase the subscribers have a vested interest in seeing real-estate return
positive gains. If you would like to read the other side of the story, check
out housingpanic.blogspot.com and/or
www.businessweek.com/the_thread/hotproperty

My personal opinion is that we are currently in the largest bubble in human
history, as exhaustivly reported in the June 2005 issue of The Ecomomist.
Furthermore, I acted upon that belief by selling my california house in
Aug05 and renting since. I think that history will bear out that Sept05 was
the tippy-tip-top of the current bubble. The prices currently being seen in
the hottest markets will not be seen again for at least 10 years.

I am sure this post will be followed by a wave of flames, but I encourage
you to do your own research. For the dissenting opinion, HousingPanic is a
good place to start, because it is a repository of all national articles
bearish on the housing market.

IMO, there are thousands of homeowners setup for serious financial woes in
the upcoming years. I don't know your personal situation, but if you are in
a position where you could be in dire straights if the market drops (ie.
short ARM, neg-am loan, etc) work to rectify that situation quickly. If you
are simply looking to cash out while the market is high, do it quick becuase
you're running out of time. Good luck!

Re: Is the real estate bubble bursting, or just losing steam?

I also know investors who sold off properties last fall, believing that
prices had peaked. One suggested he is ready to buy real estate again
when prices fall far enough, sometime in 2006. Personally, I think
prices will weaken further this Spring when the number of homes for sale
increases rather sharply, resulting in an absolute glut of available
properties, forcing prices down. The law of supply and demand will
prevail. I also think that some hot markets that have seen irrationally
high appreciation rates have the potential to experience big price
corrections. Parts of California, Las Vegas and southwest Florida have
lots of real estate that is overpriced and grossly overvalued, according
to some reports I've studied. Renard

Re: Is the real estate bubble bursting, or just losing steam?

The pricing bubble is mixd, based on a story in the December issue of
Smart Money, the Wall Street Journal magazine. It has a market report
on overvalued, fairly valued and undervalued homes. No surprise that
the overvalued (by up to 97%) homes are mainly in California and
Florida. Undervalued homes atre in places like El Paso, Tulsa, Omaha,
Memphis and Indianapolis - though I'm not sure I'd like to live in any
of these cities.

BOB

Re: Is the real estate bubble bursting, or just losing steam?

Mr P wrote:

> Is the market in for a true crash, or will it bottom out more slowly?
> Does anyone think that real estate, even in hot markets, will continue
> to appreciate in 2006? What's your opinion on where we're headed? Mr P

My realtor sister in Panama City Beach Florida tells me the brokers are
telling everyone not to lower prices in a vain attempt to keep prices
afloat and the bubble from popping. She also says that the once red
hot market is now dead.

I rarely see a conspiracy, but let's face it, the newspapers sell
tremendous amount of advertising to realtors and their brokers. That's
why you hear all of this talk of a so called "soft landing". Normally
news agencies love negative news, but local newspapers won't report
this story honestly until it's too late for many people.

So remember, everything is falling apart in Iraq, but the real estate
market is just experiencing a nice soft landing with continued price
appreciation ahead.

Re: Is the real estate bubble bursting, or just losing steam?

Sure, but consider where you live (California). Californians are in no
way capable of assessing a Real Estate market but your property values
are clearly off the chart. I'm not saying making money is bad, I'm
saying, when the average real estate temperature in the center of the
US is 98.6, California is around 107. Also, in order for a bubble
(according to economic standards) to exist, there must be an increase
in inventory. That is not the case in most markets. This is the
primary mechanism used to (forsee) the bubble coming.

You get no flames, only sympathy. I'm here to report that yes,
California will indeed "snap off" and fall into the Pacific soon...

Re: Is the real estate bubble bursting, or just losing steam?

The realestate "bubble" is more of a "credit bubble" if you ask me.
Implying even if the amount of homes up for sale increased, are the
people currently living in them able to pay the mortgages? Are their
any stats on the deliquent mortgages? That's the number I would watch
(people can sell houses for various reasons, but foreclosures are key
to bubble popping).

If employment drops, the bubble will burst. If employment remains
steady, I think a "soft landing" or no bubble popping is a reasonable
expectation.

Re: Is the real estate bubble bursting, or just losing steam?

"Amarillo Real Estate" <> wrote in message
news:
> Sure, but consider where you live (California). Californians are in no
> way capable of assessing a Real Estate market but your property values
> are clearly off the chart. I'm not saying making money is bad, I'm
> saying, when the average real estate temperature in the center of the
> US is 98.6, California is around 107. Also, in order for a bubble
> (according to economic standards) to exist, there must be an increase
> in inventory. That is not the case in most markets. This is the
> primary mechanism used to (forsee) the bubble coming.
>
> You get no flames, only sympathy. I'm here to report that yes,
> California will indeed "snap off" and fall into the Pacific soon...

This will be an advantage since it will create more ocean front proeprties
and possibly islands and thus more valuable.

>

Re: Is the real estate bubble bursting, or just losing steam?

I do agree. But I think that the prices have skyrocketted in many areas
besides just California, florida, etc.

I moved to Boise after selling in California. Upon analysing the market, I
felt it was also heated. Then I checked out Spokane. Also heated. Yesterday
I ran across graphs for each MSA and state based on the latest OFHEO data.
The link is here:

Some places certainly are an OK buy. But they are getting harder to find.

Another poster indicated El Paso, Tulsa, Omaha,
Memphis and Indianapolis.

El Paso : no -
Tulsa : no -
Omaha : not really

Memphis : ok

Indianapolis : ok


Even so, none of those markets are 'undervalued' at least according to HPI
median trends from 1975-2000. While they may not be as bad a buy as CA, they
are still above historical trends.

"Amarillo Real Estate" <> wrote in message
news:
> Sure, but consider where you live (California). Californians are in no
> way capable of assessing a Real Estate market but your property values
> are clearly off the chart. I'm not saying making money is bad, I'm
> saying, when the average real estate temperature in the center of the
> US is 98.6, California is around 107. Also, in order for a bubble
> (according to economic standards) to exist, there must be an increase
> in inventory. That is not the case in most markets. This is the
> primary mechanism used to (forsee) the bubble coming.
>
> You get no flames, only sympathy. I'm here to report that yes,
> California will indeed "snap off" and fall into the Pacific soon...
>