Is It THE BUBBLE Again?

[Fishingmn]

As a Realtor here in the Twin Cities we are certainly seeing a tight market but I think the biggest driver is the lack of inventory (homes for sale). Sales are up 10%, prices are up 10-15% but the biggest reason for price increases is that active listings are down 30% with a lot fewer foreclosed homes.

Prices are still 10-20% below the peak of 2005-06

 

[calmloki]

As a Realtor here in the Twin Cities we are certainly seeing a tight market but I think the biggest driver is the lack of inventory (homes for sale). Sales are up 10%, prices are up 10-15% but the biggest reason for price increases is that active listings are down 30% with a lot fewer foreclosed homes.

Prices are still 10-20% below the peak of 2005-06

This feels like a good assessment to me and in line with what I see in La Quinta California, which I watch hard. Slower markets that I see just don't have the buyers to move the backlog of less desirable foreclosed homes off the market.

 

[JoeWras]

Haven't (US) real estate bubbles been largely regional phenomena? Seattle is a hot spot it seems among others (San Francisco, NYC, Wash DC, Los Angeles, etc.).

But even in the 08-09 meltdown, most (flyover) areas were nowhere near as inflated and didn't fall as spectacularly. see graph here http://www.early-retirement.org/forums/f27/residential-median-sale-price-per-sq-ft-65661.html

Welcome To The New American Housing Bubble (In Coastal Elite Cities) | The Awl

Yep.

Midpack, what do you think about the Chicago area? They were one central area that had a bit of a bubble.

We're going to be selling Dad's place up there, and I don't see any huge raise. Looks like the market has finally settled to bottom and only now may be starting up. It has been brutal in my Dad's area in the NW suburbs. Homes are selling at pre-2000 prices.

 

[Midpack]

Yep.

Midpack, what do you think about the Chicago area? They were one central area that had a bit of a bubble.

We're going to be selling Dad's place up there, and I don't see any huge raise. Looks like the market has finally settled to bottom and only now may be starting up. It has been brutal in my Dad's area in the NW suburbs. Homes are selling at pre-2000 prices.

Again, everything is regional, even in Chicago. Huge swings in some areas, much less in others. We were hardly affected at all - zillow (questionable source) says our house appreciated 32% from 03 to Dec 07 (peak, it was never really worth that much) and has been steadily declining since, down 19% now but still 8% above 03 estimates.

We have friends who had much larger swings, and different trajectories since. Some areas have come back stronger from 08, others not as much (friend in Ravenswood).

Location, location, location can have upside and downside.

How The Housing Bubble Affected Different Chicago Neighborhoods

 

[timo2]

As a Realtor here in the Twin Cities we are certainly seeing a tight market but I think the biggest driver is the lack of inventory (homes for sale). Sales are up 10%, prices are up 10-15% but the biggest reason for price increases is that active listings are down 30% with a lot fewer foreclosed homes.

Prices are still 10-20% below the peak of 2005-06

Do you think that the lack of inventory is because people that always made their payments but are still underwater don't want to sell their house and lose money, when they can just as happily stay where they are? After all, one has to live somewhere.

 

[JoeWras]

Again, everything is regional, even in Chicago. Huge swings in some areas, much less in others. We were hardly affected at all - zillow (questionable source) says our house appreciated 32% from 03 to Dec 07 (peak, it was never really worth that much) and has been steadily declining since, down 19% now but still 8% above 03 estimates.

We have friends who had much larger swings, and different trajectories since. Some areas have come back stronger from 08, others not as much (friend in Ravenswood).

Location, location, location can have upside and downside.

How The Housing Bubble Affected Different Chicago Neighborhoods

Very interesting article. In my old, old neighborhood, it shows a neutral light green. Perhaps... Slight recovery. But down since '03 (Rogers Park area). I've followed the history of homes in my block, and it has not been very good. Actually, some of the places are selling at 1990s prices. It is the neighborhood, which has had some ups but more downs.

Dad's area up N. is suffering from some big corporate downsizings. Motorola has been big up in that area (multiple offices) and has been shrinking.

 

[Tyro]

Do you think that the lack of inventory is because people that always made their payments but are still underwater don't want to sell their house and lose money, when they can just as happily stay where they are? After all, one has to live somewhere.

I'm not so sure about the "just as happily" part.

 

[timeasterday]

I'm not so sure about the "just as happily" part.

Agree. That's pretty much our situation. I'd love to get out of here and move somewhere else but I'm stuck until I can sell without taking a loss.

 

[cjogo]

Supply and demand keeping the prices hot in Carmel & Pebble. Steady climb since the summer >> $22 million sale this month in Pebble.

Amazing what a 800 -1200 sqft home can run still ..on a small lot.
Median List Price $1,825,000
Median $ / Sq. Ft. $1,166
Median Sale / List 95.6%

The residential area is only about 5000 inhabitants... its a potential bubble every sale.