Homes: Hot markets get hotter

[SkinsNut73]

http://money.cnn.com/2005/05/12/real_estate/metro_home_prices_up/index.htm?cnn=yes

Home prices rallied in the first quarter; record number of areas had growth of more than 10%.

May 12, 2005: 1:04 PM EDT

By Les Christie, CNN/Money staff writer

The top 10

Home price appreciation from the first quarter 2004 through the first quarter 2005.

Metro Area Price gain

Bradenton, FL 45.6%

Sarasota, FL 36%

W. Palm Beach/Boca Raton/Delray Beach, FL 35.9%

Riverside/San Bernardino, CA 32.6%

Ft. Lauderdale/Hollywood/Pompano Beach, FL 31.8%

Las Vegas, NV 29.4%

Melbourne/Titusville/Palm Bay, FL 29.3%

Orlando, FL 28.7%

Miami/Hialeah, FL 28.4%

Ocala, FL 27%

Source: National Association of Realtors

NEW YORK (CNN/Money) - U.S. residential real estate markets lost no steam in the first quarter of 2005, according to statistics released Thursday by the National Association of Realtors.

The NAR's quarterly report covers 136 metro areas (see how they all rank). A record 66 of these have experienced double-digit jumps in home prices over the past year.

The previous record was 62 in the last quarter of 2004. Only six areas showed a fall in prices and those declines were fairly modest.

The median price of a single-family American home hit $188,800 at the end of the first quarter, a rise of 9.7 percent compared with a year ago.

The NAR, the nation's biggest real estate agent group, pointed to tight inventories as a major factor in the continued strong growth.

"We simply don't have enough homes on the market to meet demand," said David Lereah, the NAR's chief economist, in a statement. "We think the supply situation may improve next year when interest rates are expected to be higher – that should result in a lessening of demand and cooler price appreciation."

Florida heat

Three Florida metropolitan areas led the charge; home prices in Bradenton jumped 45.6 percent from a year earlier to $275,100. Sarasota was up 36 percent to $326,300 and the West Palm-Boca Raton area rose 35.9 percent to $362,800.

Beaumont, Tex. led the list of six declining metro areas with a loss of 6.5 percent to $90,000. Other losers included Canton, Ohio (down 4.5 percent to $103,400), Syracuse, N.Y. (down 2.6 percent to $92,600), and Waterloo-Cedar Falls Iowa (down 2.6 percent to $86,500).

Prices ranged from a low of $82,400 in the Youngstown-Warren area in Ohio, to more than eight times that in the San Francisco Bay area where the median price was $689,200. Anaheim-Santa Ana (Orange County, Calif.) was the second most expensive metro area at $656,900 and San Diego was third at $584,100.

Regionally, the West showed the fastest growth at 16.9 percent. In the Northeast, prices rose 14.0 percent. The Midwest had increases of 7.8 percent and the South had a 6.6 percent price rise.

The median house price was highest in the West, at $282,900, and lowest in the Midwest at $148,800.

Separately, U.S. antitrust regulators are preparing to sue the National Association of Realtors over policies they believe will illegally restrict commission discounting and harm online competitors, The Wall Street Journal reported Monday, citing lawyers close to the case. See more.

See the latest stats on 136 markets.

Here

[TheKurp]

A house two-doors down from me sold 8 months ago for $290k. The guy who bought it is in the military and found out 3 weeks ago that he's being transferred to Minnesota. He contracted with a realtor and put it up for sale for $375k about 2 weeks ago. Two days after the sign went up he accepted an offer for $380k.

Unreal.

[JMac]

I have a sister who just sold her 900 sq foot condo in Laguna Niguel, Calif. for 449k after she paid 155k for it 6 years ago. Just unreal!

[SkinsNut73]

I have 2 acres of land in Ansonia, CT...one of the most economically depressed areas in this state. We moved here for sentimental reasons - my wife and I were raised in the town, but more importantly the house that my wife's grandfather built became available...so we bought it.

It was a fixer-upper and I've put about $50K into it so far...with about another $20K to go. Anyway, last year I went for a home equity loan to finance some of the improvements...the bank would not give the full amount requested because they determined the home and land was only worth $210K. Not enough equity.

Last week a developer pulls into my driveway...said he was doing research in town and noticed I have 2 acres...wants to know if I'm interested in selling. He wants to put condos on the land and offered $425K (after several conversations).

...only problem is if I did sell (and pocketed roughly $250K) I'd have to buy in this market too...so as tempting as it is I'm not sure I can do it...but I'm still thinking about it.

...but a year ago you would have never seen anything in this town sell for $300K...now that's low in a lot of cases. It's absolutely insane.

[Sknzfan]

I Too live in a Small town and MY house has been on the Market for 2 years.....ONE Exactly "ONE"offer has been made and that from a Person that DOESN'T Qualify !.........Really Sux !

[Grumpy Vet]

In about 3 years our house has almost doubled in value.....We've done a fair amount of work on it..... but if we sold it.....we'd have to move to Canada or Iraq.....b/c we couldn't afford to live around here........pricing is insane in Howard County, MD.

What gets me though are a couple people around here that keep refinancing......keep doing things around the house.....paying off bills.....racking them up....and re-fying.....and racking them....and re-fying.....they keep going back to 30 years and while their homes are increasing in value - their equity keeps getting eaten up w/ ever refi. Sure their house will be worth 450K soon....but they are gonna owe 375K on it...and bought it for 275K just a few years ago.....

[Predicto]

SF Bay Area.

Median home price: 689,000

And most of the homes here are small.

That is madness.

[Ghost of]

Originally posted by Predicto

SF Bay Area.

Median home price: 689,000

And most of the homes here are small.

That is madness.

Here's a question and this isn't just directed at you.

Why not build UP? Tear down those small-ass lame houses that were built for a time when people didn't "need" more than 1100 square feet.

I don't mean make a house 5 stories and I know that not everyone wants to go up steps, but that's why you put the main stuff on the first floor and then only bedrooms and a den above.

I see these tiny houses on the shows on HnGarden or TLC and I'm just befuddled. For the people who can AFFORD a million dollar home, for godssakes, please redo the house so that the next person can move into a better place than a California Ranch home of 990 square feet.

[China]

Kilmer, I see prices in your area have risen dramatically:

Bradenton, FL 45.6%

Sarasota, FL 36%

[chomerics]

Originally posted by Ghost of Nibbs McPimpin

Here's a question and this isn't just directed at you.

Why not build UP? Tear down those small-ass lame houses that were built for a time when people didn't "need" more than 1100 square feet.

Simple, the ocean and the mountains. SF is not a real good area for building homes espcially considering mudslides, earthquakes, and fires. There isn't that much flat land, and building up is almost never an option due to city ordinances. It is a beautiful city, and a very popular area, but that's its downfall.

BTW, Boston is no bargain either, I was contemplating buying a home, but no way now. I am not going to spend over $400K on a house which will be worth 50% in value 5 years form now.

[Grumpy Vet]

Originally posted by chomerics

Simple, the ocean and the mountains. SF is not a real good area for building homes espcially considering mudslides, earthquakes, and fires. There isn't that much flat land, and building up is almost never an option due to city ordinances. It is a beautiful city, and a very popular area, but that's its downfall.

BTW, Boston is no bargain either, I was contemplating buying a home, but no way now. I am not going to spend over $400K on a house which will be worth 50% in value 5 years form now.

Do I understand correctly that you are saying that if you bought a house now for $400K in Boston - you believe it will be worth about $200K in 5 years? Why?

Unless they performed the "big dig" w/ mutant tunnel rats that are destined to take over the Northeast....I'd be shocked to see what you describe happen. The northeast has not taken a housing market dip in quite some time.

[Yomar]

a friend in Santa Monica bought a house for 600k 5 years ago. She just sold it for $1.2 mil.

One of my professors who is a money manager at a huge hedge fund sold his NY apartment and is renting because it is cheaper to rent than to own in NY right now.

I don't know how much longer this bubble is going to go on for, but it won't be forever.

[RabidFan]

Originally posted by Grumpy Vet

Do I understand correctly that you are saying that if you bought a house now for $400K in Boston - you believe it will be worth about $200K in 5 years? Why?

Unless they performed the "big dig" w/ mutant tunnel rats that are destined to take over the Northeast....I'd be shocked to see what you describe happen. The northeast has not taken a housing market dip in quite some time.

"They just moved the headstones" :laugh:

[tex]

Interesting that nearly half of all new loans originated in California last year were interest only ARMs. (Basically a teaser rate with no repayment of principal for a few years.) Marginal home buyers get these kinds of loans because it's the only way that they can afford the payment at the ridiculous current prices. Just wait until the rates go up AND they have to start paying back the huge amounts they borrowed!

Back in the 90s with constant easing of the requirements to get a loan demand began to rise because more borrowers were able to qualify. Used to be your loan payment could only be 25-30% of your income. Now that number can go up close to 50%. Used to be you needed a reasonable down payment, now through all kinds of combination loan deals such as 80-10-10 etc you can basically use multiple loans to get the down payment and really be 100% mortgaged. This allowed more people to get into homes and drives demand. Then came the low interest rates of the last few years and that has led to the current speculation in the market. Everybody is talking about real estate as an investment. Just like everybody was talking about tech stocks in the late 90's. I have heard in some markets that 25% of the house purchases are purely speculative, basically being bought by investors for renting or for holding and flipping. All of this drives demand as well. Demand is driving the market and supply is trying to keep up with demand. Just like The Telecoms of the world were putting as much fiber optic cable in the ground as they could in the late 90s to meet the exploding demand from the internet which turned out to be speculative. Once that demand went away there was way too much supply of fiber. What happened to the telecoms? Some of the demand increases such as the easing of requirements to get a loan probably arent' going away. But slowly the cheap interest will be removed and when the fast appreciation stops the speculation will eventually dry up as well. What will happen to all the housing supply when some of this demand goes away? It will sit there. Housing is more complicated because you can't just move housing assets as easily as stock assets but supply is trying to keep up with false demand right now and when false demand goes away the result is usually a drop in prices due to over-supply. Just a matter of when the false demand goes away.

[ohioskins]

Beaumont, Tex. led the list of six declining metro areas with a loss of 6.5 percent to $90,000. Other losers included Canton, Ohio (down 4.5 percent to $103,400), Syracuse, N.Y. (down 2.6 percent to $92,600), and Waterloo-Cedar Falls Iowa (down 2.6 percent to $86,500).

Prices ranged from a low of $82,400 in the Youngstown-Warren area in Ohio , to more than eight times that in the San Francisco Bay area where the median price was $689,200.

Let's hear it for Northeast Ohio.....WooHoo.

As you can see times are tough here in Ohio lately, that's why alot of people in Ohio feel that the economy is not recovering.

[Mania]

In Early February the townhouse across the street from me sold for $375,000. One month later the townhouse 2 doors down from me sold for $405,000 and the one across the street from him sold for $425,000 two weeks later. All the townhouses were identical. Each one of these homes sold for over $10,000 from the listing price.

It is amazing what is going on in major metropolitan areas and the DC area has a 10,000 home shortfall and won't be stopping anytime soon.

[semiskin]

My house was just appraised for 2005 by Orange County, expecting a very minimal increase due to the hurricanes last year, I ended up making $40,000 on my home after never making more than $13,000 the three years before. And while prices seem overinflated here right now, they're still a bargain in comparison to other cities.

[SnyderShrugged]

Nice! mine goes on the market next week!!

[Mr. S]

we just put our house on the market. Hopefully it sells rather quickly.

[leaping lizzy]

We bought our home on the Oregon coast just under two years ago for 240K - we've done under 10K in improvements and if we were to list it for 350K now it would sell in a day - real estate has just gone crazy here and a lot of the people who have owned for the last ten or so years are selling - but where are they going.

My parents bought their home in 1958 (San Diego County) - when they passed in 2002 - we sold it and it was in a condition that it needed to be torn down. We sold it for 675K. Unbelieveable.