Is it a Bubble, or isn't it?
Some air
might come out, but don't expect a loud pop anytime soon
Mortgage rates have hit their highest levels in more than two
and a half years, and many analysts are predicting that rates
could hit 7.0 before the end of year.
Still, higher mortgage rates are having little effect on housing
prices. Even as the supply of houses increases, the prices of
homes are still going higher.
So, when will prices drop? When will the Southern California
real estate bubble burst?
Perhaps never, according to many followers of the real estate
market. Price appreciation is cooling, but it is not leading to
price depreciation. Stabilization of prices, it seems, is the
key buzzword in home values these days.
While foreclosures were up some 45% across the Nation over a
year ago in January, Southern California foreclosures were below
the national average (more).
So, if you were waiting to buy a cheap house from a foreclosure,
you're probably going to be waiting much longer. Even if you
find a foreclosure don't expect it to be cheap.
Moreover, while the backlog of unsold homes is increasing, this
problem is particularly a problem at the high end, especially in
homes costing more than $1 million dollars. Average priced homes
are still pretty hot in most areas of Southern California.
Ultimately, experts claim that the costs of building materials
and land has risen so much that we're probably looking at the
new prices of homes. What's going to change most is yearly
appreciation.
So, by this summer's selling season, homes will probably list a
lot closer to what they did last summer, rather than 15 or 20%
higher. At least that's the price at which they'll have the best
chance of selling.
More California
Real Estate Bubble News
|
The
Last Los Angeles Real Estate Bust
The last real estate crash in
Los Angeles was huge |
Real
estate slower, but still strong in '06 and '07
The
Mortgage Banker's Association sees lower rates and better real
estate sales through 2007 than originally estimated |
Despite
bubble talk, real estate market still strong
May existing homes
sales second highest ever and mortgage rates are still low. |
April
housing starts and the bubble
With April housing
starts coming in at 11%, the real estate market isn't expected
to cool much anytime soon. |
Affordable
homes and the Real Estate Bubble
Homes
are less affordable, yet sales continue to sizzle, and rates
might not rise any times soon. |
New
home sales still sizzling
Defying the experts,
new home sales rise. Maybe the dynamics behind real estate
really have changed? |
Existing
home sales defy expectations
March
home sales indicate the real estate bubble isn't going to burst
anytime soon. |
Southern
California rents rising as supply dwindles
Data
shows Los Angeles area real estate market is stronger than some
might suspect. |
Southern California Real
Estate Bubble Debate Continues
When
it comes to bubble talk, few places are mentioned more than
Southern California. |
Will
ARMs pop the real estate bubble?
Adjustable
Rate Mortgages account for almost 40% of all new mortgages. |
The
Great Real Estate Bust, or Rust?
The
real estate market does seem to be slowing, but is a bust just
hype? |
Los
Angeles homes affordable?
What
percentage of middle-income residents can afford to buy a home? |
Real
estate bubble town hall
Notes on
last night's CNBC special on the "real estate
bubble." |
Real
estate bubble versus Internet bubble?
Is
it like comparing apples to potatoes? |
Southern
California bubble?
Rental rates rising in Los Angeles area |
Rising
rates or not, home sales still cooking
Amid rising rates, the
Mortgage Bankers Association reported that, overall,
mortgages were up 2.4% last week. |
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