Menu
TwitterRssFacebook
More Links

Are you looking for an experienced agent to help you buy or sell a home? Contact Jim the Realtor!

Carlsbad
(760) 434-5000

Carmel Valley
(858) 560-7700
jim@jimklinge.com


Category Archive: ‘Market Buzz’

Moving Out

It might get so bad that we see an occasional flurry of supply!  H/T daytrip:

More than half of California voters say the state’s housing affordability crisis is so bad that they’ve considered moving, and 60 percent of the electorate supports rent control, according to a new statewide poll.

The findings from UC Berkeley’s Institute of Governmental Studies reflect broad concerns Californians have over the soaring cost of living. Amid an unprecedented housing shortage, rents have skyrocketed and tenants have faced mass evictions, especially in desirable areas.

“It’s an extremely serious problem,” said poll director Mark DiCamillo. “People are being forced to consider moving because of the rising cost of housing – that’s pretty prevalent all over the state.”

Of the 56 percent of voters who said they’ve considered moving, 1 in 4 said they’d relocate out of state if they did.

Read full article here:

http://www.sacbee.com/news/politics-government/capitol-alert/article174026561.html

Posted by on Sep 19, 2017 in Jim's Take on the Market, Market Buzz, The Future, Thinking of Selling? | 1 comment

Housing Crisis Due to Flippers

We saw this happen in Bressi Ranch when Jenae and Company went on their 100% financing spree. Her victims weren’t deadbeats – instead, they had good credit scores and other assets, and they were just duped into the get-rich-quick scheme.  When it didn’t pan out, they dumped everything.

Hat tip Richard!

LINK

The grim tale of America’s “subprime mortgage crisis” delivers one of those stinging moral slaps that Americans seem to favor in their histories. Poor people were reckless and stupid, banks got greedy. Layer in some Wall Street dark arts, and there you have it: a global financial crisis.

Dark arts notwithstanding, that’s not what really happened, though.

Mounting evidence suggests that the notion that the 2007 crash happened because people with shoddy credit borrowed to buy houses they couldn’t afford is just plain wrong. The latest comes in a new NBER working paper arguing that it was wealthy or middle-class house-flipping speculators who blew up the bubble to cataclysmic proportions, and then wrecked local housing markets when they defaulted en masse.

Analyzing a huge dataset of anonymous credit scores from Equifax, a credit reporting bureau, the economistsStefania Albanesi of the University of Pittsburgh, the University of Geneva’s Giacomo De Giorgi, and Jaromir Nosal of Boston College—found that the biggest growth of mortgage debt during the housing boom came from those with credit scores in the middle and top of the credit score distribution—and that these borrowers accounted for a disproportionate share of defaults.

As for those with low credit scores—the “subprime” borrowers who supposedly caused the crisis—their borrowing stayed virtually constant throughout the boom. And while it’s true that these types of borrowers usually default at relatively higher rates, they didn’t after the 2007 housing collapse. The lowest quartile in the credit score distribution accounted for 70% of foreclosures during the boom years, falling to just 35% during the crisis.

So why were relatively wealthier folks borrowing so much?

Recall that back then the mantra was that housing prices would keep rising forever. Since owning a home is one of the best ways to build wealth in America, most of those with sterling credit already did. Low rates encouraged some of them to parlay their credit pedigree and growing existing home value into mortgages for additional homes. Some of these were long-term purchases (e.g. vacation homes, homes held for rental income). But as a Federal Reserve Bank of New York report from 2011 reveals (pdf, p.26), an increasing share bought with the aim to “flip” the home a few months or years later for a tidy profit.

Read full article here:

LINK

Posted by on Aug 29, 2017 in Flips, Frenzy, Jim's Take on the Market, Market Buzz, Mortgage News | 9 comments

Housing Jitters

The economists like the housing market, but they are known to play it safe.

How about the consumers?

I’d prefer to survey the active home buyers and sellers in our area to get the best reading on our future.  But here are the sentiments of 1,079 American adults over the age of 18 who were surveyed last month:

Fifty-eight percent of homeowners say that they expect there will be a “housing bubble and a price correction” in the next two years – up 12 percentage points since April.

Looking across the country, residents in hot housing states are particularly jittery. The top five states where residents believe the market is approaching a “housing bubble” include:

  1. Washington (71 percent)
  2. New York (68 percent)
  3. Florida (63 percent)
  4. California (59 percent)
  5. Texas (58 percent)

While experts have long suggested living in a home for more than seven years could lower a homebuyer’s exposure to market fluctuations, only 37 percent of millennials in the survey plan to live in next home they buy for more than six years, making the so-called “rule of seven” less relevant to the next generation of serial homebuyers.

“Beyond the jitters, I see in our survey an increasingly informed nation of homebuyers, who understand the risk of the market,” said Melendez. “To those concerned about a price correction, or waiting to time the market, I recommend a proactive approach. Have an exit plan, then anytime you find a home you love is a good time to buy.”

Read full article here:

LINK

How do you feel?  Leave your thoughts in the comment section!

Save

Posted by on Aug 17, 2017 in Forecasts, Jim's Take on the Market, Market Buzz, Market Conditions, Thinking of Buying?, Thinking of Selling? | 7 comments

10% Risk of Correction in U.S.

New research from JPMorgan examining historic data found that the risk of a dramatic decline in prices is low, despite current fears of a correction in the U.S. and Canada.

Using data from 14 developed countries dating back to 1950, JPMorgan’s research found that sharp price corrections have been relatively uncommon, even following large price increases.

“The data show that sustained increases in real house prices have been the norm rather than the exception in the post-World War II era, as rising populations and incomes have pushed up land prices,” Jesse Edgerton, U.S. analyst from the investment bank’s economic and policy research team, said in the report entitled “Quantifying housing correction risk in Canada and the U.S.,” published late Tuesday.

“Of course, there have been occasional large price declines over multi-year periods, as we saw starting in 2006 in the U.S. But such declines have not been common, even after periods of rising prices,” he said, adding that the chance of a decline in prices was low.

“Simple models based on these data put the chance of a 20 percent decline in real prices within the next five years (roughly equivalent to a 10 percent decline in nominal prices) at about 20 percent in Canada and 10 percent in the U.S.

Read full article here:

https://www.cnbc.com/2017/07/26/jpmorgan-points-to-low-risk-of-a-us-housing-correction.html

Posted by on Aug 4, 2017 in Jim's Take on the Market, Market Buzz | 0 comments

Four or Five More Years

An excerpt from this article:

http://www.latimes.com/business/la-fi-home-prices-20170725-story.html

Home prices have now been rising for more than five years, the result of a growing economy, rock-bottom mortgage rates and a shortage of homes on the market.  Economists said that absent a recession or a surge in mortgage rates, California home prices could keep climbing at 5% a year for the foreseeable future.

That’s faster than the long-term average of 3% nationwide, but it’s difficult to build housing in California and the economy is strong, said Richard Green, director of the USC Lusk Center for Real Estate.

“It could go on for another four or five years,” he said.

CoreLogic’s report showed that home prices in Southern California rose in every county last month compared to a year earlier, not just in Orange and Los Angeles counties.

In San Bernardino County, the median was up 12.3% to $320,000; in Riverside County, 7.5% to $357,000; in Ventura County, 2.7% to $565,000; and in San Diego County, 9.8% to $543,500. Across the region, sales rose 4.3%.

Chris Thornberg, founding partner of Beacon Economics, said he doesn’t expect a recession and thus doesn’t foresee a time when home prices stop rising.

“Candidly, the only thing that could upset the apple cart in California is if we build a whole bunch of housing and that’s as likely as an alien attack.”

Posted by on Jul 27, 2017 in Forecasts, Jim's Take on the Market, Market Buzz, Sales and Price Check | 0 comments

Statewide Community Infrastructure Program

The Statewide Community Infrastructure Program (SCIP) sounds like another name for 30-year Mello-Roos-type bonds whose proceeds are used to pay for things that governments or home builders used to cover.

Here is their intro:

The Mello-Roos at this Carmel Valley new tract is $2,932.90 per year, plus the Statewide Communities Infrastructure Program requires another $4,300 per year (total = $7,232.90 or about $603 per month):

Posted by on Jul 7, 2017 in Bubbleinfo TV, Builders, Carmel Valley, Jim's Take on the Market, Market Buzz, Mello-Roos | 5 comments