Good series of articles with a dubious pricing analysis at CNN Money today - look at the chart for your city and comment.
I can tell you Phoenix would be lucky to get a single digit decrease - to get back to the historical Rent / Ownership PE line, or income line, we'd be looking at 30%+ declines (and we will)
Everybody from Los Angeles to Boston -- your mom, your doctor, your dry cleaner -- is puzzling over which way the nation's real estate market is headed. Up or down? Bubble or not?
December 19, 2005
Fortune Magazine: Real Estate: Is the party over?
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4 comments:
Don't trust the chart.
Oxnard Area is listed as median $480,300. Last month the median was actually $645,000. This is NOT an excusable error. If they predict flat for 2006 then they mean 30% reductions.
I thought the analysis was kinda whack... Mainly the results
Mabye instead of "median" they meant "price for a crack-den"?
Probably hired some high school kids to do the analysis as part of a Home Ec 101 class project
A little explain; Fortune has an annual "Best Places to Live" series. They just grab some weirdly unconnected quality of life information and force them into a formula. Oxnard on the coast has an air pollution index of 110 but Westlake Village on the border with Los Angeles 38. Westlake Village is contigious with Thousand Oaks 72. Both adjacent Calabasas but each with half the crime of Calabasas.
In short, so fundamentally mistaken it isn't even wrong.
I believe the $480K median price for existing homes in Oxnard, which has a severe crime and gang problem. New construction there is priced in the 600s and up, soon to be 500s and up and still not selling. I've lived in Camarillo and now live in Westlake Village. The air is much cleaner in Westlake Village than Camarillo, which borders Oxnard, both surrounded by agriculture, one of the most polluting industries in the world. Oxnard also has military bases and powerplants and stinks to high heaven. I also believe the crime stats for TO, WLV, and Calabasas. However if they included the major crimes committed in Calabasas, the headquarters of the nation's biggest mortgage lender, this number would just explode.
I agree with Robert Cote's comment, the downside predictions were weak. There will be drastic downside in Oxnard in 2006.
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