Sizing the Housing Bubble

[bpp]

69k people is a pathetically small sample group. 

I would naively think that 69k is an exceptionally large sample group. The statistical error should be negligible. Systematic errors should completely dominate, for reasons such as the example you gave.

 

[cute fuzzy bunny]

CFB, most people will gladly answer questions candidly if they are assured anonymity.

Thats when they lie the most.

Because theres no accountability, they'll tell you what they want to be/have/think/drive/own/etc.

Not what they are.

Heck, I ran a series of polls here that I said were quite serious and I hoped for fine anonymous, accurate answers. By my analysis, roughly half to two thirds of the answers were goofing off or not factually accurate.

But someone mailing you a government survey is going to make you want to give the right answers?

And yes, most government studies are BS.

They start with a bias and a conclusion and conclude with the data to support it.

But if you like the data and if it supports something you feel strongly about, you should consider it gospel.

I sure as hell wont change your mind!

 

[Martha]

And yes, most government studies are BS.

You have a study to support this?

 

[cute fuzzy bunny]

Do you have someone that wants to fund that study?

 

[Alex]

Thats when they lie the most. Because theres no accountability, they'll tell you what they want to be/have/think/drive/own/etc.

Not what they are

Spoken from your own experience on this forum, no doubt. I now know at least one person that's full of BS on this forum.

 

[Scrooge]

I now know at least one person that's full of BS on this forum. 

CFB eats Bachelors of Science now? Sheesh, and I thought that infanticide was bad

 

[lazygood4nothinbum]

with new residential construction down in june 2006 anywhere from just under 10% to just over 40% in the surrounding counties here in south florida (miami, past west palm beach to port st. lucie), broward county (fort lauderdale et al) is up almost 30% from june 2005, all of that in apartments (single family housing construction is down here too--very few large tracts left).

 

[cute fuzzy bunny]

Spoken from your own experience on this forum, no doubt. I now know at least one person that's full of BS on this forum.

Hairball.

 

[ShokWaveRider]

with new residential construction down in june 2006 anywhere from just under 10% to just over 40% in the surrounding counties here in south florida (miami, past west palm beach to port st. lucie), broward county (fort lauderdale et al) is up almost 30% from june 2005, all of that in apartments (single family housing construction is down here too--very few large tracts left).

That contradicts a little of what I heard from a friend in the Fort, that has had her home on the market for 9 months and can't sell it. It does not seem to be over priced at all and is in a nice area. She has to move and will most likely end up taking a loss or breaking even over what she paid 2 years ago in order to sell it.

So you see depending on who you talk to the answers to the housing situation are different.

SWR

 

[lazygood4nothinbum]

That contradicts a little of what I heard from a friend in the Fort, that has had her home on the market for 9 months and can't sell it. It does not seem to be over priced at all and is in a nice area. She has to move and will most likely end up taking a loss or breaking even over what she paid 2 years ago in order to sell it.

So you see depending on who you talk to the answers to the housing situation are different.

SWR

rest assured the stats i listed above are pretty darned accurate. i'm not suggesting we are in great shape here as the positive ft laud number surprised even me. perhaps my story does not quite contradict your friend's, as these numbers were for construction of new units, not sales of existing ones. sales are indeed likely down. certainly most developers & real estate companies are laying off employees. but many projects are still pushing foward. stats on june sales for existing housing should be issued today.

the longest i've seen anything linger on the market in my area so far has been about 6 or 7 months. just took a walk last night, one cutie i really like just sold, been for sale since jan/feb this year. i'll check county records in a few weeks when new price is posted.

i checked on another one that sold recently. it is a 2/2, 1200 sf, fronting one of our busiest 2-lane roads and one lot away from a 4-lane main drag. overlooking it's backyard is a 5-story rental apartment building. the house was built in the 1950s. it does look from the outside that someone did a fair job renovating it. sale price $399k. i wouldn't give ya $250k for it, not even with the new paint.

i'll post local june existing sales info here when the papers publish them.

 

[ShokWaveRider]

Lazyg4n:

Here in St Augustine, prices seem stable now, but there are a lot of reduced signs. People are not really selling the homes though, I see the same ones evey month in the mags and in the paper. (Taxes ~ $16 per 1k)

JAX seems to be having a lot of forclosures, 7th highest in the country I think. There are lots of homes in nice areas for around $250k - $350k (Taxes ~ $18 per 1k)

Palm Coast is terrible, Reduced signs everywhere. For a community of 65k people there are 2500 - 3500 properties for sale on any given day. Rentals for a $250k - $300k home hover around $900 per month. (Taxes ~ $17 per 1k)

St. Augustine and Palm coas have the better climate than JAX. The rain and storms are a lot less. At least this and last year.

Those are the only 3 communities I really watch.

SWR

 

[lets-retire]

On the west side of the state, it seems that accurately priced houses sell without too many problems. The biggest issues seem to be the agents optimistically pricing thier listings. The house across the street from me has been on the market for about 8-9 months. It is the same floorplan as mine, except they enclosed the screened porch giving about 300 sf more. He is asking 349 and I just sold mine for 233 after being listed for 2.5 months.

Looking at what the area is commanding mine was priced reasonably. His is more inline with the pond front houses listing in the area. The only pond near his house is the cement one in his back yard.

 

[ShokWaveRider]

On the west side of the state, it seems that accurately priced houses sell without too many problems. The biggest issues seem to be the agents optimistically pricing thier listings. The house across the street from me has been on the market for about 8-9 months. It is the same floorplan as mine, except they enclosed the screened porch giving about 300 sf more. He is asking 349 and I just sold mine for 233 after being listed for 2.5 months.

Looking at what the area is commanding mine was priced reasonably. His is more inline with the pond front houses listing in the area. The only pond near his house is the cement one in his back yard.

That is a 30% difference, where in the country are you?

SWR

 

[eridanus]

Look out below!


http://money.cnn.com/2006/07/25/news/economy/homesales/index.htm

Realtors: Home sales now a 'buyer's market'
Sales fell for third straight month in June; nearly flat prices make double-digit gains seem like a distant memory.

NEW YORK (CNNMoney.com) -- It's official - even the nation's leading group of real estate agents now says it's a buyers' market in housing, as a soaring supply of homes for sale means nearly flat prices and longer waits for sellers.

The news came in the National Association of Realtors' report for June, which showed that home sales fell to the slowest pace since January last month while price gains were the smallest in over a decade.

 

[neo]

Since there are so many Floridians on this thread, you all might find this interesting, on the topic of how property tax increases are making it hard for some to move within the state in FL:
http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20050922/NEWS/509220705/-1/SPECIAL09

I am amazed at how insane the whole property tax situation has become in much of the country, and yet how little media attention it gets. Having just sold our house in western WA, I've been looking at lots of listings here and elsewhere (mainly AZ, where we're moving, but just renting for now). It's common to see a 30-50% difference between the current county-appraised value of a house, and the asking price. A lot of houses listed at ridiculous prices and not selling, at least around us. but if someone does buy at the inflated price, or anywhere near it, the taxes are going to jump up accordingly.

IMO property taxes are the most pernicious kind of tax. They're set according to some arbitrary formula that's not related to your ability to pay, and about which you can do nothing (usually). As we've seen recently, they can rise at a _much_ faster rate than inflation. For retirees, this problem seems at least as bad as the escalating cost of health care.

 

[brewer12345]

Look out below!

Yup. 6.8 months inventory now on the market. Condos now have an 8+ month inventory, likely from all the would-be flippers who are getting their asses handed to them.

I can see that NM condo now... at 50% lower than current prices.

 

[SteveR]

The RE market here is still going up. The bubble is not slowing down...partly because it was late getting here (just like everything else) so our bubble is just now expanding. I just received my RE tax statement for this years taxes and the estimated value is up more than 20% from last year. Recent sales in the area and even Zillow all seem to show the same relative trend. The house has now increased in value over 35% in 3.5 years.

 

[wabmester]

I've been in SoCal for the last week or so and picked up a few housing anecdotes.

We're staying at a place in Irvine -- one of the hottest markets in SoCal.   The house next door is for sale.   Zillow says it's worth $900K+.   Recent comps were around $880K.   The place has been on the market for months, has had several price reductions, and is now priced at $845K.   Still no sale.   Nothing wrong with the place -- built in 2001 and still like new.

One of my BIL's works for a large builder based down here.   They have a hiring freeze.

A friend had a conversation with a VP from another large builder.   They are seeing crazy cancelation rates.   Over 50% in some markets.   He says if you want a good deal on a house, take out a contract on a new one, and cancel the contract.    Builders are *very* motivated to save those sales.

 

[al_bundy]

The RE market here is still going up.  The bubble is not slowing down...partly because it was late getting here (just like everything else) so our bubble is just now expanding.  I just received my RE tax statement for this years taxes and the estimated value is up more than 20% from last year.  Recent sales in the area and even Zillow all seem to show the same relative trend.  The house has now increased in value over 35% in 3.5 years. 

my wife laughs at me when i tell her that our place is worth what someone will pay for it when we have to sell it, not some magical number she reads about

I bought an apartment in NYC for $135,000 in 2003. People in the neighborhood are asking $240,000 now for places that aren't renovated and ours has been completely renovated. She says we won't get a penny less than $250,000. I tell her I'll believe it when i see it.

 

[lets-retire]

SWR--I'm in the Tampa area.

Timo--It's a good thing we have a lot of old people down here.  A lot of houses/condos come on the market simply because people pass on, not because they move on.  This at least keeps some of the property taxes keeping pace with government spending.  It seems the people who are having the hardest time affording the increase in taxes are those who have been in the same house for a long time.  These also seem to be the same people complaining that they can't move.  If I were ging to stay in this state until retirment, I'd sell the same time I retired and move to a less congested area.

 

[cute fuzzy bunny]

Yup. 6.8 months inventory now on the market. Condos now have an 8+ month inventory, likely from all the would-be flippers who are getting their asses handed to them.

I can see that NM condo now... at 50% lower than current prices.

You wanna feel the screw?

A bunch of apartment buildings in the Sacramento CA area "went condo", sold a portion of their units, and then when the rest wouldnt sell...went back to being an apartment building!

So voila...you paid $300k for a 2 bedroom condo that was supposed to convert and now you own an apartment in a building where a portion are owners and most are renters!

Good luck on THAT resale...

 

[brewer12345]

You wanna feel the screw?

A bunch of apartment buildings in the Sacramento CA area "went condo", sold a portion of their units, and then when the rest wouldnt sell...went back to being an apartment building!

So voila...you paid $300k for a 2 bedroom condo that was supposed to convert and now you own an apartment in a building where a portion are owners and most are renters!

Good luck on THAT resale...

Eh, caveat emptor. Always risk when you buy at a discount to the full meal deal.

 

[laurence]

Those conversions are a total disaster in my area, and yet they keep doing it! People are paying as much as I did for my house to get an 800 sq. foot apartment conversion in a questionable (I'm being kind) neighborhood. Right on a busy intersection with the bus depot and across from an Albertsons.

It's my understanding this is what's pushing out the condo inventory and crashing it's values...?

 

[lazygood4nothinbum]

june 05 to june 06

miami-dade went up another 4%

fort lauderdale dipped to $377,400 from $378,000 (medium price), about where it's been all year.

palm beach county dropped to $405,500 from $406,800 after having hit a high of $421k in november 2005 and the so-far-recent-low of $390k in jan 2006.

statewide prices rose 3% june to june.

Lazyg4n:

Here in St Augustine, prices seem stable now, but there are a lot of reduced signs. People are not really selling the homes though, I see the same ones evey month in the mags and in the paper. (Taxes ~ $16 per 1k)

you live in a really pretty area, at least it was from when i was a kid until my last visit back in the 70s. my favorite uncle lived in jax and kept his boat in st augustine later in life, right next to hoss's boat (of bonanza fame). before moving to a condo--been a long while but i think it was in area called baymeadows--he had a wonderful house right on the st john river. you could almost land an airplane in that backyard. can't imagine what the taxes would be on that today but i'm certain i couldn't touch it.

taxes here in broward are just sick. new homeowners pay $23 per 1k. thanx to "save our homes" homestead exemption, i pay less than $1,500 to live in a house worth more than $400k. there is talk of reducing millage but i doubt they'll lower enough for anyone to notice much.

On the west side of the state, it seems that accurately priced houses sell without too many problems....He is asking 349 and I just sold mine for 233 after being listed for 2.5 months.

i think this is a very good observation and i see similar in our area. there's a house nearby which hasn't sold probably in 5 or 6 months. it's been listed at $400k which i thought from the get-go was too high even for the insane 2005 period. it's a nice parcel, but directly across from rental apartments, is only 800 or 900 sf and hasn't been updated since it was built probably in the late 1940s. the current owners (they bought right about when things peaked) haven't even planted a shrub. i see on realtor.com the price just dropped to $350k which looks about right as either a teardown (i don't think our lots would sell for less than that) or to add $60,000 to upgrade the house. it would have sold eventually, problem was he had it listed at the 2008 price, not at the 2006 one, so of course, it would have taken 2 years to sell.

Since there are so many Floridians on this thread, you all might find this interesting, on the topic of how property tax increases are making it hard for some to move within the state in FL:
http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20050922/NEWS/509220705/-1/SPECIAL09

I am amazed at how insane the whole property tax situation has become in much of the country, and yet how little media attention it gets.

more likely this forum sports more florida bashers than resident participants. not a problem. we've survived numerous named storms. we can handle a few hits from some screen-named clouds.

you are absolutely correct on the tax issue though. sometimes i think i'd like to "downsize" from my overpriced little cottage but i simply couldn't afford to move & increase my taxes seven-fold. so i am trapped in a totally wonderful little house just a 3-mile bike ride to the beach. woe is me.

there is talk here about to a california-ish tax thingy whereby we can take at least part of our existing homesteaded exemption with us were we to move within the county or state. nothing yet on that. the best idea someone came up with but then someone else immediately shot down was allowing us to sell our exemption along with our house. they feared it would bring in speculators and drive up our prices too much. i guess that wouldn't be good for the state but boy would that be great for me.

what i totally don't understand about taxes is that now that prices have risen so much and government is collecting billions more, how come i don't notice any improvement in services? (not that it needed improving--it's really quite good.) but, um, where's all that newly collected money going?

Those conversions are a total disaster in my area, and yet they keep doing it!...It's my understanding this is what's pushing out the condo inventory and crashing it's values...?

here we have a combo of conversions and new builds pushing inventory, add to that higher prices, taxes and insurance. i'll be glad if some of the conversions bust. as i've mentioned on another post, in just the last year or two (i forget just what i read now), we lost about 25% of our rental housing stock. if we don't recapture that i'm afraid all our restaurants are gonna turn into self-service cafeterias. and then i really will be trapped.

 

[Nords]

Dude, I'm just not keeping up. Let me consolidate your comments & questions into one post:

So, are suggesting that this and all other government studies are essentially steaming piles of BS??

Yes, your tax dollars at work. Data provided for taxes is probably pretty accurate, but surveys are usually crap whether they're paid for by the govt or by TH's former employer.

yet you still spend lots and lots of time revealing all sorts of personal data on this forum......are you being compensated? or do you do it for other reasons? I'd guess that you get something else out of it. As do the people that participate in polls and surveys.

Yes, I think so. I enjoy writing. I think the personal info provides credibility, although I "went public" to deal with a particularly antagonistic poster.

Asking & responding to questions on this forum forces me to organize my thoughts, figure out what I'm doing & why, and understand it well enough to explain it to someone else without inviting comments like "Hairball!"

If filling in survey ovals with #2 pencils or blue-black ink makes other people feel happy & fulfilled, kindly send me names & addresses and I'll send them my surveys.

Ok - do you have that data? I would not be surprised if it was pretty close to (within the margin of error) the Census data.

Nope. I wouldn't be surprised either, but I'd be a lot more confident in the quality of the data.