Real estate market bubble?
Recently many real estate cheerleaders have been hyping up the fact that investors have purchased over 20% of single family homes in recent months. (It must be a good time to buy because “investors” are buying the homes!) There was another time in history when investors made up 20% of single family home purchases:
. . .
“The NAR reported that 23 percent of all homes sold in 2004 went to investors — not counting the 14 percent that went for use as vacation homes.”
-bankrate.com
Nearly all the 2004 investors have lost a fortune on their investments.
Currently, all the headlines are reporting nationwide gains in home prices. What’s not being well reported is the fact that around August, nationally, home sales started declining.
The Case-Shiller report on existing home sales in 20 major metropolitan markets has shown a general trend of increasing prices combined with slowing sales. It would seem that the tight supply of homes available for sale combined with rising mortgage rates has been causing existing home sales to slow over the last three months.
Just last week, the National Association of Realtors reported that their pending sales index, adjusted for seasonal variations, declined by 0.6% from September and was off by 1.6% from its October 2012 reading. This pending home sales index tracks signed home purchase contracts whose sales have not yet closed. This index is now at its lowest level since December of 2012!
Back in the summer of 2005 when I wrote my article entitled “A trend about to go national“, it was just this divergence of continued modest home price increases, while the number of home sales were declining that signaled the end of the San Diego housing boom and the start of the worst housing market bust in history!
The Fed, through it’s QE, is the real reason behind the housing and the stock market bubbles
Seems Time Magazine has also noted that a new real estate bubble may be at hand. Here is part of what they said on 11-12-13:
Markets in Orange County California and Los Angeles are more than 10% overvalued. Kolko also pegs the Austin, Texas market at 10% overvalued, while 7 other markets range from 4% to 7% overvalued. Those include:
San Antonio, TX;
Honolulu, HI;
San Francisco, CA;
Houston, TX;
Riverside-San Bernandino, CA; and
Oakland, CA
http://business.time.com/2013/11/12/where-the-next-huge-real-estate-bubble-may-be-building/
Lol California the next Detroit, hey come to Texas were the Saudi Arabia of America lots of gas n oil.