Less Blogging
Unfortuneatly my ability to blog has been curtailed just as things are getting interesting. Also, since the other blogs have done a great job, such as Grims Site, covering other markets, I've tried to limit my postings to info that is only pertinent to the Jersey Shore. As a result, I have not been posting much here lately. If anyone wants to be a guest blogger for awhile let me know and maybe we can arrange something. Send me an e-mail at silvered.little@gmail.com.
posted by Little_Silvered at 6:40 PM
15 Comments:
hi silver. i hope things are well by you and that nothing too serious is going on. when do you think you'll be able to give the blog your all again?
Here's the latest nationally:
New statistics show the nation's housing slump continued in the fourth quarter, and some market analysts are warning of another year -- or even several years -- of flat or falling home prices in many U.S. markets.
Figures released Thursday by the Office of Federal Housing Enterprise Oversight indicate that while home prices grew nearly 6% nationally last year, national numbers masked the drama in local markets, where some cities boomed, some saw prices recover and others experienced dropping prices.
Overall, there was negligible growth -- 1.1% -- in the fourth quarter.
The slowest-growing home prices were in manufacturing states -- Michigan, Ohio, Indiana and Minnesota -- and Massachusetts, where appreciation had been overheated in previous years. Once-red-hot Nevada, which saw the fastest rise in home prices two years ago, dropped to No. 40.
In the New York City, Los Angeles and Miami areas, growth fell faster in suburbs and outlying towns than in central cities. The 10 metro areas with the biggest price declines for the year were:
• Kokomo, Ind., -5.3%
• Santa Barbara-Santa Maria-Goleta, Calif., -4.2%
• Jackson, Mich., -3.9%
• Monroe, Mich., -2.7%
• Anderson, Ind., -2.6%
• Mansfield, Ohio, -2.6%
• San Luis Obispo-Paso Robles, Calif., -2.6%
• Springfield, Ohio, -2.5%
• Sacramento-Arden-Arcade-Roseville, Calif., -2.4%
• Flint, Mich., -2.4%
Yet there were still parts of the country, particularly in the West, with sharp price increases. The hottest states were Utah, Wyoming, Idaho, Washington and Oregon.
In Texas, where the housing boom of the early decade was largely absent, growth took off in 2006, especially in the El Paso area (up 17% for the year), Beaumont-Port Arthur (up 9.9%), Austin-Round Rock (up 9%) and San Antonio (up 8%). Houston-area prices grew nearly 7%. Analysts credited the Texas increases to affordability and the strong oil market.
Some of the strongest growth in the U.S. was in smaller Northwest towns, where growth was lower previously and there's still much undeveloped land. The 10 metro areas with the biggest home-price gains for the year were:
• Bend, Ore., 21.4%
• Wenatchee, Wash., 20.9%
• Provo-Orem, Utah, 19.9%
• Salt Lake City, 19.8%
• Boise City-Nampa, Idaho, 17.9%
• El Paso, Texas, 16.5%
• Flagstaff, Ariz., 16.2%
• Corvallis, Ore., 16.2%
• Mount Vernon-Anacortes, Wash., 16.2%
• Longview, Wash., 16%
When will the slump end?
Observers of the housing market are extremely cautious about predicting when it might hit bottom. They cite several reasons for their caution, including falling prices in many -- but not all -- markets, an oversupply of new homes and condos, the rising cost of money and the shrinking of easy credit due to the imploding subprime lending market.
Leo Kamp, the head of investment strategy at TIAA-CREF, doesn't expect home prices or sales to start picking up until next year. Other analysts expect a turnaround to take even longer. *Kamp urges consumers to examine the federal government's latest housing figures for their own local and regional markets because the numbers vary widely.*
In some markets -- Florida, parts of California, Las Vegas, parts of New England and the Boston-New York-Washington corridor -- prices became so inflated in recent years that homes grew unattainable, causing a severe slowdown in sales and a backlog of available houses.
Prices will have to drop to put homes within reach, Kamp says. In Nassau, Long Island, where Kamp lives, "we had three years of back-to-back 30% yearly (housing price) increases, followed by steep price drops in the last year."
He does not expect prices to drop severely in most markets across the nation. The bust "is not going to bring the whole industry down," he says. However, Kamp adds, it may become quite severe in certain regions.
Morris A. Davis, an assistant professor of real estate and urban land economics at the University of Wisconsin-Madison School of Business, expects a longer downturn.
"I think we are in for another three years of below-average (growth) for house prices and residential real estate investment," Davis says. "I think a case can be made that the busts we've had (in history), they've lasted about four years (in total).
As always, though, regional markets -- and even local markets -- differ greatly from each other. Housing has "always been a mixed market," says John Benjamin, a professor of finance and real estate at American University in Washington, D.C.
"The interesting thing is (that) maybe 90% of the country is stagnant or declining, but there's maybe 10% -- places like Odessa, Texas, or Dallas, where housing is doing well because of oil," Benjamin says.
"In Fort Dix, Md., and Fort Belvoir, Va., there is growth because the military is moving people to that market. There's growth in housing demand in oil-producing and energy regions like Texas, Oklahoma, North Dakota because the oil industry is doing well."
Where the trouble started -
The housing bust began with prices inflated by speculation in some areas, and now it is being sustained by credit problems, analysts say. Lenders are tightening requirements and likely will demand higher credit scores, more documents and better income verification, or else borrowers will pay higher interest rates.
Of the $8 trillion to $9 trillion in mortgage debt outstanding in the country, a half-trillion dollars' worth is about to be converted to higher interest rates now that introductory teaser periods are expiring. People holding those loans are finding their escape hatches closed, Benjamin says, with mortgage rates rising, credit getting tighter and property values in many places dropping.
"During the boom in the first half of the decade, homeowners who got in trouble could bail themselves out" by selling their homes at inflated prices, he says.
Analysts point to a spate of recent bad news in the real-estate industry:
• New-home construction starts dropped 14.3% from December to January, putting them 37.8% below the same time a year earlier, the U.S. Department of Commerce reported. Building permits dropped 28.6% from a year ago.
• Last month's sales of existing homes were down 4.3% from January 2006. There are about 1 million homes on the market, though the oversupply peaked in October.
• Sales of new homes dropped, according to the Commerce Department, by 20% between January 2006 and January 2007. In the High Frequency Economics newsletter, analyst Ian Shepherdson calls January's 16.6% plunge in new-home sales "unexpected" and the biggest one-month drop in 13 years. But he blamed weather patterns for some of the trouble.
• The National Association of Realtors predicts the cost of a 30-year fixed mortgage will jump to about 6.6% by the end of the year.
Some good news, some not so good
Around the country, real estate agents are struggling to discern when a turnaround will come to their towns.
Boston, where home prices had tripled in six years, saw home sales "hit a wall" in late 2005, with prices dropping between 8% and 18%, says real estate agent Caroline Holland of Prudential Prime Properties. She helps many people who are relocating into Boston buy homes, and lately, she says, real estate has been making a comeback.
With 20 to 30 of her clients shopping for homes, she has been finding "there's not enough inventory for us," particularly in sought-after suburbs such as Cambridge and Concord, Mass. There, "I have people looking in the $700,000s, $800,000s and $900,000s, specifically for new construction, and we can't find anything, I have people looking in Concord for $1 million, $2 million and $3 million, and there's not enough choices. The hot inventory is getting gobbled up."
Today, Holland says, a seller who purchased a house in the 1990s can probably get two or two and a half times what they paid for it.
In Fort Meyers, Fla., though, the damage done by speculators still haunts the real-estate market, says Sandee Bozzuto, an agent with Coldwell Banker Residential Real Estate.
The market peaked in summer 2005, after appreciating nearly 130% in five years. "I couldn't put a sign up fast enough in 2005 to the point it was sold," Bozzuto recalls.
Since then, prices have dropped 6% to 7%. But the worst of it is the great number of homes sitting unsold. Bozzuto blames speculators who bought "pre-built" homes in 2005, hoping to flip the properties for a quick $100,000 profit. By the time those houses were built, in 2006, the boom was over. Now, sellers are dumping those properties onto the market at a loss.
First-time buyers beware -
Meanwhile, there's clear advice for some homeowners and potential buyers.
Because of the credit crunch, "I'd be advising most first-time homebuyers to forgo or postpone buying a home right now, no matter how compelling their reasons," says mortgage broker Brett Buchanan of Orange County, Calif.
But with wide differences in housing markets around the country, it's tough for analysts to give consumers blanket guidance. Look at it this way, Kamp says: If home prices had boomed -- if they went up more than, say, 5% a year in the past few years -- they're likely to come back down some. You probably wouldn't want to buy a home right now in, say, Las Vegas (with 105% appreciation in the past five years), where Kamp says he recently spent a week in a new development of about 40 homes that was mostly empty.
However, investment may be safer -- prices are less likely to drop, or drop very far -- in Texas and other parts of the country where the speculative fever never took hold, especially in places with lots of land. He named Charlotte, N.C., as an example, where home prices are still "very reasonable."
Guidance for the rest of us
Davis, the University of Wisconsin-Madison assistant professor, says that if you are thinking of buying a home, consider this:
• Don't buy a condo right now. Because of an oversupply in many regions, prices may keep dropping for some time.
• Vacation property prices are inflated in many areas and may be due for a slide.
• Should you remodel? That depends on your motive. Upgrading in order to stay in a house 10 more years makes sense in today's market, Davis says. But remodeling to turn the house for a bigger profit may not be good strategy at the moment.
• If you want to buy because you hope the price will increase and create wealth for you, hold off. Wait until values stop dropping.
• If you are happy renting and don't need to own, patience is a virtue right now.
• If your motive is not financial but to put down roots, sink your teeth into a renovation project or acquire room for a growing family, Davis advises buying an inexpensive home where, if prices drop, you've won't lose much.
• Any bargains to be had at the moment are in the high-end markets in regions where prices went sky-high. If you want to trade up, this could be a good time for that -- though, of course, a lot depends on your local market and on the homes you'd sell and buy.
The past two weeks has shown a fairly significant kick-up in activity in the eastern monmouth county real estate market.
It remains to be seen if this is a fluke, or if the prices have moderated to the point of a sustainable market.
Personally, I see many old listings selling, as the sellers have tempered thier expectations, and lowered their prices.
The hope is that new listings do not see this as an opportunity an jump in at a too high price. The word for the day should be "restraint". and caution.
"Robert Toll, CEO of high-end home builder Toll Brothers, told the New York Times in 2005 that his company, which had enjoyed astonishing growth for more than a decade, would grow by 20 percent annually in 2006 and 2007, and then go for 15 percent annual growth. Yet in virtually every quarter since the article appeared, Toll has lowered expectations, called a bottom—and then lowered expectations again. In February 2006, Toll Brothers projected it would deliver between 9,200 and 9,900 McMansions for the fiscal year ending October 2006, down from the previous projection of 9,500 to 10,200. But Toll reduced its expected deliveries in May and again in August and wound up delivering 8,787 for the whole year. But bitter experience hasn't made Toll any better at calling the bottom. In November 2006, the company said it expected to deliver between 6,300 and 7,300 homes for fiscal 2007, down from the prior prediction of 7,000 to 8,000 deliveries. By February, Toll said it expected to deliver only 6,000 to 7,000 homes. And it's doubtful Toll has successfully called the bottom now. The Census Bureau data on new housing sales for January, released earlier this week, showed a whopping fall of 20 percent from the year-ago level, and down 16.6 percent from December."
http://www.slate.com/id/2160973/
Latest count of major US mortgage lenders that have croaked since late 2006:
33 lenders have now gone kaput
Also see the ailing company list. New: scam alert; consumers beware!
http://ml-implode.com/
(Last addition: Mar 8, 2007)
Deep Thought Of The Week
~ Bear Stearns analysts upgraded New Century (NEW) one day before the company announced it was breaching covenants with its warehouse lenders, which was also the same day it came to light that NYSE and state criminal probes had been opened against the company for trading irregularities. Bear Stearns is itself heavily involved in mortgage lending at almost all levels. How credible does all this make Bear Stearns, I wonder? ~
Top 25 Subprime Lender list
(as of Q2 2006; from the Mortgage Banker's Assoc. Red are shutdown and/or bankrupt, blue are no longer operating independently) -
1. Wells Fargo
2. HSBC Household Finance [rumored to be up for sale]
3. New Century [in breach of debt covenants; restating '06 earnings downwards; major shareholder lawsuits; blanket national layoffs beginning]
4. Countrywide
5. Fremont General [2007-03-02; residential subprime activities ceased]
6. Option One [H&R Block; up for sale]
7. Ameriquest [On life support from Citigroup; may end up acquired. Owned by ACC. Recently shut most offices and settled with 30 states over predatory lending]
8. WMC [subsidiary of GE Money]
9. Washington Mutual [some branch closures starting late 2006]
10. CitiFinancial
11. First Franklin [acquired by Merrill Lynch from National City for $1.3bln]
12. GMAC [Major layoffs in ResCap; Looming writedowns subprime loan portfolio and residual]
13. Accredited Home [is delaying '06 earnings filing]
14. BNC [Lehman bros. subsidiary]
15. ChaseHome Finance
16. Novastar [serious impairments; likely no dividends in 2007, no taxable income through 2011; shareholder lawsuits]
17. OwnIt, 2006-12-07 [partially-owned by Merrill and BofA]
18. Aegis [recently closed two subprime operations centers]
19. MLN, 2006-12-29 [Much of the sales force has gone to Lehman]
20. EMC
21. ResMAE,2007-02-13 [acquired by Citadel]
22. FirstNLC
23. Decision One [owned by HSBC; rumored to be up for sale]
24. ECC/Encore [fire-sale bought out by Bear-Stearns]
25. Fieldstone [2007-02-16, bought by C-Bass]
(Partly based on information from here. Old, biased list available here).
More like no blogging..........
No just proof the bubble has gone pooftt
So Sally, in an earlier thread you told us how strong the rental market was but never quite got around to explaining what lead you to that belief.
Care to enlighten us?
Hey everyone, since there hasn't been any Kara news I thought I would relay a funny thing I did.
I feel bad that Zudi is not getting any advertising so what I did was collected 12 of those Kara Homes burgandy jackets and donated them to the Ocean County Homeless project in Stafford. So you should start seeing alot of homeless people wearing the Kara jackets. This should give Kara some free advertising. Does anyone think Robbie Schultz will take the jackets away from the homeless if she sees them. Anyone who has a Kara jacket (there should be about 250 of them out there) start donating them to homeless shelters and jacket drives. We can put a new face on Kara Homes!!!!! If you have any shirts you should donate them also!!!!!
Sally, Sally, Sally...... Ridiculous as usual. The reason nobody is blogging is because there are no new postings to comment on. I suggest you check out njrealestatereport.com. I would love to see the responses you get to your comments.
This comment has been removed by the author.
This comment has been removed by the author.
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