The bursting bubble sure has hit the mainstream now. Which, even though it's a day late and dollar short, actually does in some way hasten the end of the boom - as that nervousness in the back of minds of potential buyers and also all homeowners
Here's the equation: More listings + Less Buyers = Declining Prices = Worry = More Media Coverage = Panic = Many More Listings = Rapidly Declining Prices = Common Sense.
And away we go....
Are we nearing the end of those sky-rocketing real estate prices? The typical home in America has appreciated 55 percent since 2000. But many areas of the country saw even more dramatic appreciation than that. Now, there’s strong evidence that the record pace is starting to slow. Has the housing bubble has sprung a leak?
Nancy and Phil Marrone spent today cautiously going over new home listings, and doing a few walk-throughs in Northern New Jersey. They’re worried they’re buying just as the market turns south.
“You may invest in something that you like and then all of a sudden you can’t sell it for anywhere near what you paid for it,” says Phil Marrone. “It is a little scary.”
December 30, 2005
NBC Nightly News: Has the housing bubble sprung a leak?
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3 comments:
House values should be tied to demographic income. Right now it is tied to hopes and dreams of a future nest egg.
We are well setup for a bear market starting in 2006.
I agree. It’s an unbelievable time to rent. I’m renting a luxury downtown Minneapolis apartment for less the $1000/mo. I have a two-year lease, exercise room, indoor heated pool, concierge service, indoor heated parking and a spectacular 30 floor view.
To get anything approaching that I would have to spend nearly 3x as I am now. Instead, I have $20,000+ year, cash, that I can invest in foreign currencies, gold, treasuries, the stock market, etc. And what’s really nuts is that there are actually better deals to be had. I’m renting straight out in an apartment complex right now, but you can sublet condos from flippers with an ‘option to buy’ with the same amenities for less then even what I’m paying.
One year ago there were handmade signs posted by freeway entrance ramps offering to buy any house for cash. Now there are signs in the same spots offering to sell condos CHEAP.
I heard merril lynch's chief economist at the end of a cnbc interview where he was discussing the coming meltdown in homes, end his interview with Maria B. by shouting out "Keep renting!"
Best advice I ever heard.
Ah, the peace of mind not owning a house today.
Where's the smart money today? On the sidelines.
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