Pent-Up Demand or Mini Housing Bubble

Homes Sales Up Nationally – What’s Going On?

House and Money ImageHome sales and prices are up nationally. The increase is taking up back to 2005 pricing levels. I’ve seen some news where the issue of a new bubble in home sales and prices is being talked about, but I don’t think this is what’s happening.

The bubble that burst in 2006 was fueled by speculators with access to easy money. Lenders were giving stated income mortgages to people who were simply not going to be able to pay them back. These speculative buyers could only survive if prices continued to rise. They didn’t and the wave of mortgage delinquencies, foreclosures and falling prices began.

We know that the latest price and volume increases are not fueled by easy money. Mortgage money is tight. Many of the REO to Rent investors are using cash, not borrowed money. Further getting back to 2005 prices is about where we should be without the crazing price increases during the bubble.

I just read an article over at AG Beat that gives the latest housing numbers and projections. These numbers are from pent-up demand that we’ve been expecting might happen for some time. Many buyers were waiting to see price increases before they bought. Now they’re seeing price increases accelerating and they’re jumping in. It’s normal market behavior. Be careful of news reports and current numbers. Watch the market over quarters and years and you’ll get a better idea of what is really happening.

Prices are rising in Daytona Beach and surrounding areas. You can check all area listings without registration at search Daytona Beach homes.

Online Real Estate Valuations Unreliable

Online Real Estate Valuations Unreliable

Rapidly Changing Market Causes Valuation Problems

Real estate valuation sites, such as zillow.com are relying on historical information based on what has sold in the past. When little to nothing is selling, how accurate can those estimates be?

In the entire Daytona Beach area, 231 residential homes and condos sold in December 2007, and 160 sold in January. The small number makes finding reliable comparisons difficult. We know that homes prices for homes sold have been falling. The Daytona Beach and Ormond Beach median home prices dropped about 12% last year, but very little has been selling. See more on Daytona Beach homes prices here. [Read more…]

Real Estate is like a Box of Chocolates

Real Estate is like a Box of Chocolates

Real Estate is like a box of chocolates”, you start each day thinking you know what will happen that day and then you receive a wonderful surprise. [Read more…]

Merrill Lynch Housing Forecast – Prophets or Fools

Blindfolded Forecaster

Merrill Lynch Housing Forecast – Prophets or Fools

Merrill Lynch, the large financial firm whose previous predictions resulted in a $7.9 billion loss in their third quarter of 2007, has released a new forecast. Merrill Lynch is forecasting a 25-30% drop in national housing prices in the next few years.

I’m forced to wonder about Merrill’s reasons for issuing such a forecast. [Read more…]

How Does 3/4% Fed Rate Cut affect Real Estate?

How Does 3/4% Fed Rate Cut affect Real Estate?

In a surprise move, the Federal Reserve cut its federal funds rate by 3/4% from 4.25% to 3.5%. This rate impacts credit card, home equity line of credit, and auto loan rates.

What about mortgage rates? [Read more…]

Real Estate Rebound in Daytona Beach?

Real Estate Rebound in Daytona Beach?

Yes, we could be seeing the bottom of the real estate market in Daytona Beach and around the country.

Recently major economists and bankers have forecasted a recovery for the real estate market in 2008. [Read more…]