More and more folks searching for a new home are bypassing real estate brokers.
According to research (shown in the table above) by the National Association of Realtors, 38 percent of buyers found the home they ultimately purchased from a sales agent last year. Contrast that statistic with Continue reading
Experts cannot agree on how long housing’s crisis will continue or how to fix the problem.
You may have noticed my characterization of the situation as a “crisis,” and certainly everything that has happened in housing in the last three years has been tragically dislocating to millions of families and profoundly harmful to the economy. No one knows when it all will end or even how bad things will be when it’s finally over.
The effects of the bursting bubble have thrown lives into chaos and helped make a shamble of the economy, and that’s where the word “crisis” comes in. Whether ameliorating the crisis means that the nation will–or should–return to 68-69 percent home ownership is another matter on which I have written and will consider again below
Morgan Stanley housing strategist Oliver Chang:
Whether it’s the sidelined, shadow or current inventory, the issue is Continue reading
It is hardly surprising that there has been a flurry of stories in the last few days about the impact that heady bonuses will have on Wall Street. Will they goose real estate sales, especially at the higher end? Continue reading
Robert Shiller now is warning that house prices in some areas of the U.S. could be approaching bubble territory, Global Edge reports.
Home prices in San Francisco and elsewhere have risen by double-digits over four months and look they as if they are in “bubble territory,” Shiller contended, adding:
“It is entirely possible that even with the bad news we are getting, home prices could start a major increase. . . What happens from here will depend on people’s animal spirits and speculative impulses.”
He also predicted rising unemployment would not stop prices from ncreasing:
“Even in the Great Depression real home prices were rising with the unemployment rate above 12 percent. . . Just because we have high unemployment does not mean the stock market cannot boom and the housing market cannot boom.”
Shiller, of course, is that Yale economist who correctly predicted that the recent housing bubble would burst and gave his name to half of the flawed index that he shares with Karl E. Case.
Shiller made the bubble forecast for years. He was right, eventually. Even a clock is right twice a day.
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Analyzing trend data from First American CoreLogic and the Federal Housing Finance Administration, PMI Mortgage Insurance reports in its latest Housing Market Mortgage Review “that the bulk of the home price declines are behind us.” It continues:
“. . . Both also suggest that house prices have still not reached their long-term trend levels.”
As with other goods and services, house prices depend on demand and supply. Over a long period of time, however, the growth rate in home prices should conform to income growth – otherwise houses would become either increasingly unaffordable or more affordable, PMI observes, adding that over long periods, home price growth and income growth tend to be similar.
The data are shown in the charts below. The first one shows CoreLogic’s Home Price Index (HPI), while the second graphs actual levels of the HPI through July 2009, as well as the long-term trend based on the 1983-2001 house price data. And the third charts the same relationships for the FHFA purchase-only HPI.
This stuff ain’t easily digestible, but it’s good for you. Like carrots and leafy vegetables. The explanation that follows the charts is worth reading and can well make clear what you’re seeing.
In response to congressional noise, the head of the Federal Housing Administration contended the other day that raising downpayment requirements or taking similar steps to limit the pool of eligible buyers for FHA-backed loans would hamstring a fragile housing recovery.
And, you know what, he’s right.