Semi-Upbeat Housing News 10 comments
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I am starting to find spots of recovery in the housing markets where I have some knowledge. I have been chronicalling here over the last few months the apparent start of a recovery in the Sacramento market. I have also lived for extended periods in Las Vegas and I am sharing the article linked here. Here are a couple of excerpts:
Home sales in Las Vegas increased for the sixth straight month in June
Realtors sold 2,226 single-family homes in June, up 50.8 percent from the same month a year ago and up from 2,026 sales in May.
That has reduced the supply of homes on the Multiple Listing Service from about 18 months at the beginning of the year to 13.7 months at the end of June.
Bank-owned properties are setting the pace in sales and helping establish the bottom in prices…. They account for about 65 percent of closings.
The median home price in June was $225,000, a 4.9 percent slide from May and 26.2 percent decline from a year ago
Similar to Sacramento, in Las Vegas foreclosed properties are driving sales, but that inventory needs to be absorbed before semi-normal market conditions can resume. Las Vegas still has tremendous population growth and this market is another sign that the former super hot real estate market are starting to recover from the pull back.
An op-ed piece from the Los Angeles Times shoots a hole in the plans for those who want to tell everyone where to live for the greater good of all-in their opinion.
Read it at your leisure, but here is my favorite line:
The “out of the suburbs, back to the city” narrative rests more on anecdote than demographic or economic fact.
Although the current correction in housing is quite severe, primarily due to the easy and somewhat deceptive credit practices during the rapid runup, it appears it is not “different this time” for the U.S. real estate market. Granted, I write about markets I am familiar with and not looking at the “big picture” but I see the market working off excess inventory and a leveling of home prices.
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This article has 10 comments:
www.thegearedinvestor....
It's obvious where I stand after reading, but I do give my precautions; especially if anyone is a young, eager buyer.
Cheers
Hey GEARED, I read your article. You do mention you wouldn't try to catch a falling knife, but then you say you would buy a home or stock today if you planned on keeping it for 20 years. So, is your advice don't try to catch a falling knife unless you have 20 years to heal, then you should go for it? I'm not sure I understand your logic when it comes to the stock market.
And to everyone who says "don't try to catch a falling knife," is your advice to look for what appears to be a clear recovery before you buy (which seems much easier in housing the equities, in my opinion).
Las Vegas had the hottest year ever recorded last year and the most consecutive days over 110 degrees in its history: 15.
If location, location, location is the major determiner of real estate value then Las Vegas is a modern real estate Sodom and Gomorrah.
Even buying property there has become a gamble.
Never turn off the air conditioning and place your bets ...
You are a brave man to have written this article. I have written several that are similar on my blog and had the same sort of reception that you are receiving. I'm beginning to think that the blogosphere at least is full of masochists that don't want to see this end.
I'm in Phoenix and we are experiencing the same sort of rebound. May sales were actually a touch better than May 2007 and we've had 5 months of increasing sales.
As for catching a falling knife (that phrase has been over worked to death) I would like to introduce the skeptics to a few multimillionaires that I know who were accused of doing the same thing at the end of the S&L crisis of the early "90s. To paraphrase Sir John Templeton, one of the greatest investors ever, you should always buy at the point of maximum pessimism.
What is the average income in your area? Multiply that by 3 and see what you come up with. Even with two workers in a family you still don't get up to the prices in many area of the country.
If food and fuel continue to go up maybe it should be only 2 times your income.
In my town the prices are stagnant. In my county overall they are down 10%. Can you tell my why I just received a tax bill reassessing my property for 10% MORE?
OVERTAXED IN SAMMAMISH WA
IT IS DIFFERENT THIS TIME.
Wow, OK, I've gotten it out.
Energy will not be reduced in cost for 10 years unless something comes out of left field.
If one follows TB Pickens - we will collectively give away $7 trilliion to pay for foreign oil over the next ten years. This comes out of discretionary income - or should I say what we used to call discretionary income.
Before any of the gas prices even began to escalate the Comptroller of the Currency was decrying the sorry state of US financial affairs speaking to anyone who would listen i.e., Petersen Foundation that the US is broke. The NPV of our liabilities both short and long term is somewhere north of $60 trillion.
OH OK, let's eliminate medicare. Sorry, that doesn't work. You transfer the liability from a government balance sheet to a private one. Same problem persists only the government's ability to tax the population is diminished.
Come on left field...
I think that you have to come down to earth and Lock at normal markets where people work regular jobs not exceptions like Ca and L.Vegas
It seems like the only homes selling on Long Island are Bank owned homes to younger fools than the ones that bought them before they were trashed.
The 30 percent of the bad money homes sold from the latest figures are all starter type homes and they are being given to people just to move into questionable areas and to people that otherwise would just not be able to buy.
These darn banks are so bad that they are just starting the process all over gain just to make their books look better.
We are going to be in a real fix when these second incompetent row of people buy what they really can't afford.
The banks are a bunch of fraud operators and the Govt is just as bad cover up the lies and bring more sand.
So we can cove the stink of our wasted efforts at digging second row of graves for homeowners that have to retire and can't because they are redoing the same thing that started the sub prime mess just Transferring the existing mortgages instead of checking
and securing competent buyers to reduce their losses.
One other thing,
Even apartments will not even help the building line or business. As most all the people that have stopped paying and the banks are letting them just sit there, some in forbearence for some haven't even got enough money to move let along put down first last months rent and security and have any moving money.
By the way almost every other house in our county has a addition added to it for a relative already for the last 10 years and now for rental where are you going to house the retired people that have had their pensions taken away by reduction as many companies have given notice that they can't fund the pensions that people thought they had money in. Get out there and talk to people your keypad won't give you a clue of what is really going down.