This video is a fun way to experience home prices since 1890. Feel the pull of appreciation and the drop of depreciation on this fun wild ride through the US real estate market.
Click Here to Take a Ride:
One of the unintended consequences of high fuel prices is the apparent effect upon home sales, urban planning and a shift to inner city living, as people flee the suburbs to cut their commute time and expense.
A new report, Driven to the Brink, issued by CEO’s for Cities, a non-profit group, points out the fact that high gas prices have been an overlooked factor when evaluating the reasons behind the housing crisis. The report finds that the decline in home prices has been more severe in metropolitan areas and suburbs that require lengthy commutes, and where there is a lack of public transportation.
That sentiment was also reflected in a poll of 900 Coldwell Banker agents. 96% of the agents surveyed reported that rising gas prices were a major concern for buyers and 78% said high fuel prices were driving demand for city living.
As real estate prices and sales volumes are studied, it certainly seems that the price of driving a car is changing the definition of location, location, location. Homes that are close to public transportation, jobs, schools and shopping are selling, even in today’s “buyers market”, as home buyers place greater importance on cutting gas bills and commute times.
What this means to sellers, buyers and investors is that people are looking at where the home is located in a new way. They are considering the price of gas and driving time before purchasing. Drivers paying $4.00+ per gallon for gas, do not take commutes for granted, nor will the allure of new construction, granite counters and stainless appliances pull them out to the suburbs, away from their jobs and schools.
In conclusion, gas prices are changing real estate values and the shift appears to be permanent. Vibrant cities with good public transportation have become a lot more valuable, while rural area’s and suburbs, built on $2.00/gallon gas, have lost their appeal. This shift is a tremendous opportunity for cities and developers who remix land uses, add higher density housing and better transporataion.
If you are selling or buying a home, you must understand the impact that gas prices have on the definition of location. You may quickly discover that the rising price of gas means living near the train station is the best thing for your bank account and your home appreciation.
In an effort to soften the sharp housing downturn, the Senate recently passed a $150 Billion Bill to provide relief for homeowners, in theory, for homebuilders, for certain.
The “foreclosure relief” bill, which now moves to the House for approval, sounds helpful, but falls shamefully short on solutions or assistance for homeowners losing their houses. In fact, the only set aside for those facing foreclosure is a $100 million in counseling assistance, which possibly makes sense to prevent over-borrowing, but accompishes nothing after the fact.
Relief for Homebuyer’s received a mention in the bill, but the real help offered was for the benefit of bankers, developers and builders.
The bankers and builders receive a $25 Billion Dollar Tax Rebate and plans to steer buyers to their foreclosed properties, with the lure of a $7000 future tax credit. The bill provided a $0.00 tax credit, if homebuyer’s purchase a home owned by anyone else.
Translation: Homeowners, who are paying their mortgages on time, will suffer an immediate $7000 loss in home value, as they attempt to compete against lenders, builders and developers when selling their property.
In Conclusion: The $150 BILLION Dollar Relief bill harms taxpayers and homeowners, and does little for families in financial trouble. The only “help” offered is for the politicians, banks and the powerful, cash laden, National Association of Home Builders, who threatened to stop handing over millions of dollars in campaign donations, unless they were cut in on the taxpayer give away. The result. When the votes were counted… the money counted more. The Senate sealed the deal by a 84 to 12 margin.
Question: Have we had enough, already??? Don’t you think if the US Congress really wanted to help the housing market, they would simply offer a $7000 tax credit to anyone who buys a home that they intend to live in (ie: no investors), no strings attached??? Instead, homeowners and buyers are penalized in favor of the banks and builders who likely created this mess in the first place.
Action: I urge everyone who cares about their home to immediately write their State Representive in protest, before this bill is passed. We don’t have millions of dollars for lobbiest or bribes to get their attention, but we do have numbers and the power of the pen on our side.
Good news for Homeshoppers. The nation is bracing itself for a wave of new, mortgage defaults, as early as June.
The Fed estimates that 1.7 million subprime loans, originated in 2005 at the top of housing boom, will reset in early summer. The Fed goes on to say that without loan modifications, 1.4 million of those loans could become a problem, spelling more trouble for an already burdened market.
The truth is that foreclosures are only beginning to accelerate, leaving a wake of suffering in their path. Until the inventories move and owner’s occupy now vacant property, we will likely face further price declines of more than 20% by next year.
So, who among us will suffer the most?? Simply, the regions and states with the highest foreclosure rates.
The Top 10 Foreclosures States:
While the news pundits, scholars and politicians debate whether the US is actually in a recession, the hard-working US citizen has no doubt. We are in a recession and only bottom we see is the one in our empty pocketbooks.
Thanks for visiting www.infotube.net .
According to a poll by Housing Predictor, originator of the most heavily watched studies in real estate, 3 out of 4 consumers polled want to buy real estate within the next 2 years. After a two year housing slump, this is certainly welcome news.
Ironically, record foreclosures are at least part of the reason for the real estate fever. It seems many consumers are willing to jump back into the housing game due to slumping sales, falling prices and interest rate cuts which make buying more secure and affordable.
To date more than 2 million homes have been foreclosed and the number of homes in the process of foreclosure are still increasing. Forecasts call for 5.6 million foreclosures through 2010 unless the Fed intervenes in a widespread manner, which is unlikely and possibly ill advised.
Thank you for visiting www.infotube.net
With many major home builders clearly struggling, why aren’t new home prices falling as fast as we see in the pre-owned home sector? The answer is they are, but the discounts come in the form of incentives to purchase, rather than price cuts.
Home builders are relucant to slash prices in their own developments with good reason. Dropping prices creates panic among homeowners who have already purchased and encourages buyers, who are still under contract, to walk their deals and run for the hills.
For example, publically traded Lennar homes disclosed that their base sale price has remained stable, but their average incentive to new buyers is approximately $50,000 per home. This slight-of-hand discount allows Lennar, like other builders, to discreetly reduce their prices, instead of obviously reducing their prices.
Home builders choose to give away free appliances, vacations, cars, special financing or free swimming pools in order to keep peace in the neighborhood, while maintaining higher prices for the community and future build jobs. So, why does this appealing alternative only work for builders and new homes??
Incentives work for builders because they are in control of the inventory in a new home development. Individual sellers in existing neighborhoods have a difficult time “sweetening the pot”, as an option to slashing their asking price, because unlike the builders, they can not control what price their neighbor will sell for.
When making an offer for a new home, don’t expect your builder to accept an offer $50,000 less than the sales price, but do take them up on their offer for a new BMW.
Home sales and prices continued to drop in the Bay Area, with the median sale price hitting below $550,000.
A total of 3,989 new and resale houses and condos sold in the nine-county Bay Area in February, down 36.7 percent from 6,305 for February 2007, DataQuick Information Systems reported.
January and February are typically the two slowest months in DataQuick’s statistics, which go back to 1988.
“Sure there are price declines out there, especially in inland markets. But it’s not realistic to think many sellers are going to drop a $600,000 or $700,000 asking price down to $550,000 just so a buyer can finance with a conforming loan. We can only conclude that a lot of activity is just on hold, hence the spectacularly low sales counts,” said Marshall Prentice, DataQuick president.
In Alameda County, sales dropped 44.5 percent to only 753 sales and the median home price dropped almost $100,000 to $486,500. Contra Costa reported a 35.1 drop in sales and a new median sales price of $450,000. San Mateo also dropped 35 percent in home sales and its median dropped to $646,500 from $720,000 in February 2007.
Solano County also had a 39.3 drop in sales and the median sales price dropped $95,000 to $350,000 from last year.
The median price paid for a Bay Area home was $548,000 last month, down 0.4 percent from $550,000 in January, and down 11.6 percent from $620,000 in February 2007
Southern California home prices continued to fall at a record pace in February, and are now at 2004 levels, a real estate information service reported today.
The median price for a Southland home last month was $408,000, down 17.6% from a year ago, according to DataQuick Information Systems. Area home prices have now fallen 19% on average from their peaks last year.
The steep price declines are putting many more homeowners “upside down” — owing more on their homes than their homes are worth. Forecasters say foreclosures will likely continue to rise and prices will fall further.
About one-third of Southern California homes sold in February had been foreclosed since January 2007, according to DataQuick. A year earlier, previously foreclosed homes accounted for 3.5% of sales.
BREAKING SOUTHERN CALIFORNIA HOUSING NEWS
Since September, each month’s sales totals have been the lowest for comparable months since 1988, DataQuick said.
The rapid pace of the decline has led Los Angeles economist Christopher Thornberg, who last year predicted a 20% decline in Southern California home prices, to revise his projection. He now thinks prices will fall 40%.
In the last real estate bust, Southern California home prices dropped 19% between 1991 and 1997, according to DataQuick.
The median down payment on homes purchased last year was 9%, according to the National Assn. of Realtors. With median prices down by more than that percentage in Southern California, it is likely that the typical homeowner who bought last year is now upside down. Last week, the Federal Reserve reported homeowners now own less than half the equity in their houses, the lowest level since 1945.
UCLA Anderson Forecast Director Edward E. Leamer also believes home prices are still declining. He had predicted a 20% to 25% decline from the peak.
Leamer thinks his prediction is still on target, and that other indices show a slightly smaller price decline so far. The Case-Schiller Index, for example, shows Los Angeles and Orange County home prices to be 15% below their peak. That index, Leamer said, shows the market is still correcting itself.
.
According to a new survey released by HouseHunt, buyers have taken the drivers seat. For the first time in years, price appreciation has slowed to low single digits and demand has cooled, as the number of sellers is now greater than, or equal to, the number of home buyers.
Other Findings in the Survey Include:
*Days on the Market: With home for sale signs sprouting like weeds, only 26 percent of agents reported that homes were selling in less than 60 days. One year ago, 77 percent said homes were selling in 60 days or less.
*Sales Versus List Price: 50 percent of sellers were getting 95 percent or more of their homes listing price. In the Northeast, only 72 percent of sellers were getting 95 percent or above.
*Seller to Buyer Ratio: Over the entire nation, home sellers currently out number home buyers 52 to 36. 12 percent of markets reported a 50/50 split between buyer and seller. Biggest exception was reported in the Chicago area with 62 percent of the market made up by sellers and only 31 percent composed of buyers.
*Annual Price Appreciation: 43 percent reported 0-5 percent appreciation. 16percent reported 5-10 percent. Negative price appreciation was felt by 33 percent of respondents.
*Multiple Offers: What a difference a year makes. One year ago 89 percent of sellers reported they received multiple offers for their home. This year, only 25 percent of sellers have received more than one offer.
Move Ups versus First Time Buyers: Move up and repeat buyers outnumbered first timers 57 to 43. The ratio in the south was even larger at 70 to 30.
Let me know what is happening with your sale and market. Email questions and comments to tommi@infotube.net
Subscribe to this RSS feed