I understand the madness on the coasts... but when inland areas start to reach for the heavens it's not credible to say a "few" markets may see some leveling off in price appreciation. I find the following areas pretty unbelieveable (in addition to what CR mentioned):
Sacramento 26.9%
Phoenix 24.4%
Tucson 19.8%
Richmond 16.2%
Jackson 15.6%
Springfield 15.4%
These are all inland areas with no constraint on the supply of new homes/condos!
Glad to see my hometown of WPB, FL is in the top ten. My dad closed on the last of his properties there this month ... after 83 years the old man still has a deft touch, lol.
Reminds me of a very ancient tale...Hamlet's mill. Seems the Dark Ancient Ladies had this mill the Giants of the North made. It churned out salt. Hamlet stole it and the Grey Ladies of the Sea overturned his boat, using the Dragon of the North.
The mill now sits in the skerry quern and grinds out salt which is why the sea is salty.
See? Somethings can run magically forever! Why not wealth appearing out of now where via one's own home?
Point of information: From my observation, in the midwest, the biggest reason for the large gains in selected cities is the building of $200,000+ houses. Existing homes of lower values are not seeing that kind of appreciation.
If the median price includes both new and existing homes, then the new construction in small/medium cities could be influencing the data in those areas. There is definitely a lot more activity at the high end.
I'd love to see a time series for some of those cities to see how much volatility the median sales price has experienced in the last few years. I might look into that.
I think it's safe to say that there is a boom in Peoria, but not a bubble.
William, the next OFHEO housing price index will be released on June 1st. Their methodology is based on repeat sales and addresses your concerns. We can revisit some of these NAR prices then.
From the NAR site this statement:
"NAR President Al Mansell, CEO of Coldwell Banker Residential Brokerage in Salt Lake City, said much attention is focused on first-time buyers. Without such strong activity by entry level buyers, the market would be much slower, he said."
made me wonder how the entry level buyers can afford the record prices. (Maybe they are entry level real estate agents or appraisers). The reason cited was 'low interest rates', but if anything, I'd say that with the latest prime increase, potential buyers are moving their purchases forward anticipating even higher house prices with continuing low interest rates...or is it anticipating higher interest rates and no hope of owning an entry level house?
I'd be interested in the number of new buyers and the number of multiple home buyers.
Following your link, I see that Wichita is near the bottom of the list with only a 2.48% appreciation for 2004.
I visit Wichita now and then. I can tell you there is a new construction boom going on there too. I see this as pretty strong support for my hypothesis that new construction in small/medium midwestern cities is biasing their median price listed in the NAR report.
Peoria comes in with a respectable 5.27%. Since their methodology includes refinancing, I'd go along with that as quite realistic from my experience. I would guess that the "purchase price" for a refi is the appraised value, which is a little higher than the price it might actually command on the market. Excluding refis might shave a percent or two, don't you think?
Definitely not a bubble. Whether 2 to 5% is a boom is your call.
In the Bay Area we have been seeing "range compression". As affordibility has become more precarious, demand has shifted down the house price scale, so "entry-level" units have risen and "higher-end" units declined by various degrees.
In "desirable" but not "exclusive" areas close to, but not too close to, transportation and business infrastructure, companies, and in "good" school districts, single-family homes, regardless of shape, cannot be had unter $500,000, more likely around $700,000. And we are talking about around 1000+ sqft living space and not necessarily big lots.
I understand the madness on the coasts... but when inland areas start to reach for the heavens it's not credible to say a "few" markets may see some leveling off in price appreciation. I find the following areas pretty unbelieveable (in addition to what CR mentioned):
Sacramento 26.9%
Phoenix 24.4%
Tucson 19.8%
Richmond 16.2%
Jackson 15.6%
Springfield 15.4%
These are all inland areas with no constraint on the supply of new homes/condos!
This is a good read here:
http://www.sagecapital.com/Archiv/050420_Corrigan_paper.pdf
Glad to see my hometown of WPB, FL is in the top ten. My dad closed on the last of his properties there this month ... after 83 years the old man still has a deft touch, lol.
Still the experts will continue to say there is No housing bubble!
Yup. The Eternal Money machine.
Reminds me of a very ancient tale...Hamlet's mill. Seems the Dark Ancient Ladies had this mill the Giants of the North made. It churned out salt. Hamlet stole it and the Grey Ladies of the Sea overturned his boat, using the Dragon of the North.
The mill now sits in the skerry quern and grinds out salt which is why the sea is salty.
See? Somethings can run magically forever! Why not wealth appearing out of now where via one's own home?
Point of information: From my observation, in the midwest, the biggest reason for the large gains in selected cities is the building of $200,000+ houses. Existing homes of lower values are not seeing that kind of appreciation.
If the median price includes both new and existing homes, then the new construction in small/medium cities could be influencing the data in those areas. There is definitely a lot more activity at the high end.
I'd love to see a time series for some of those cities to see how much volatility the median sales price has experienced in the last few years. I might look into that.
I think it's safe to say that there is a boom in Peoria, but not a bubble.
William, the next OFHEO housing price index will be released on June 1st. Their methodology is based on repeat sales and addresses your concerns. We can revisit some of these NAR prices then.
Here is their site.
Best Regards!
From the NAR site this statement:
"NAR President Al Mansell, CEO of Coldwell Banker Residential Brokerage in Salt Lake City, said much attention is focused on first-time buyers. Without such strong activity by entry level buyers, the market would be much slower, he said."
made me wonder how the entry level buyers can afford the record prices. (Maybe they are entry level real estate agents or appraisers). The reason cited was 'low interest rates', but if anything, I'd say that with the latest prime increase, potential buyers are moving their purchases forward anticipating even higher house prices with continuing low interest rates...or is it anticipating higher interest rates and no hope of owning an entry level house?
I'd be interested in the number of new buyers and the number of multiple home buyers.
CR,
Following your link, I see that Wichita is near the bottom of the list with only a 2.48% appreciation for 2004.
I visit Wichita now and then. I can tell you there is a new construction boom going on there too. I see this as pretty strong support for my hypothesis that new construction in small/medium midwestern cities is biasing their median price listed in the NAR report.
Peoria comes in with a respectable 5.27%. Since their methodology includes refinancing, I'd go along with that as quite realistic from my experience. I would guess that the "purchase price" for a refi is the appraised value, which is a little higher than the price it might actually command on the market. Excluding refis might shave a percent or two, don't you think?
Definitely not a bubble. Whether 2 to 5% is a boom is your call.
In the Bay Area we have been seeing "range compression". As affordibility has become more precarious, demand has shifted down the house price scale, so "entry-level" units have risen and "higher-end" units declined by various degrees.
In "desirable" but not "exclusive" areas close to, but not too close to, transportation and business infrastructure, companies, and in "good" school districts, single-family homes, regardless of shape, cannot be had unter $500,000, more likely around $700,000. And we are talking about around 1000+ sqft living space and not necessarily big lots.
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