Who's still buying houses out there today, that's my question...
Housing markets have cooled a bit, but not before prices got even less affordable than ever.
Although many overheated U.S. housing markets lost steam during the third quarter of 2005, most still grew less affordable.
That's according to the Local Market Monitor, a real-estate market research provider.
Through the third quarter of 2005, 79 of the 100 surveyed markets had gotten more expensive, relative to what Local Market Monitor calculates as fair value.
At the top of the list for overpriced cities was Santa Barbara, Calif. at 86 percent overvalued. The average home there should cost $308,900, according to the Local Market Monitor. Instead it sold for $573,100. The survey found that only 16 of the markets had gotten less expensive.
Overall, 37 markets were found to be severely overpriced, which meant that they were at least 15 percent more expensive than they should be, and only 6 were underpriced by 15 percent or more. Fifty-seven were deemd to be farily priced.
January 23, 2006
CNN: Home prices get even more overvalued (take a look at your hometown)
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15 comments:
By the time the media starts to report substantial dips in housing prices, the worst will already be over and it will already be time to buy.
True
Looks like my town is 33% overvalued. This report doesn't tell me anything I couldn't have figured out just observing random people & their behavior.
Take a close look, a lot of those "undervalued" areas are LOSERS in the globalism race. Many are areas losing their industry to CHINA etc. Others are undergoing demographic shift.
Why is Santa Barbara popular? Spectacular weather and a spectacular city. It is a classy place and is attracting classy people with BUCKS!
Places like Cincinati, Ohio or Columbus, Ohio are LOSING THEIR INSDUSTRY and skilled population. Infact ALL of OHIO is in trouble due to the huge loss of manufacturing jobs. Lima, Ohio even had a movie made about.... Lima: LOST IN MIDDLE AMERICA.
The Governor of Ohio says that HIGH TECH COMPANIES JUST DON'T WANT OHIO and Duke Properties is PULLING OUT OF OHIO!
So take your pick: Ohio-a LOSER
Santa Barbara a WINNER! And this SHIFT is going on all over the place.... just check out the census.
Amen Hemorrhoid!
My thoughts on this whole thing exactly!! I'm in San Diego and am experiencing the same issues you are in SF. It seems if I bought a house now at $450K in a really bad neighborhood, it would take me nearly 6 years to recoup the difference in money lost than renting where I'm at now in a really good neighborhood. It blows me away how stupid and shortsighted people are.
Don't call me a troll! The people I know who live in Santa Barbara are very wealthy retirees enjoying a beautiful city and (cheap real estate taxes). My theory is that these people made their money elsewhere and are choosing to spend it in Santa Barbara or maybe they like the Seventeen Mile Drive at Pebble Beach.
As an example the late Ray Kroc founder of Mc Donalds did not live in Illinois. He had a beautiful home near Solvang. Another computer multi-millionaire recently bought a large ranch near Los Alamos. He opened a motorcycle museum in Solvang. Just look at what has happened to the shore properties of Lake Tahoe where the billionaires have chased out the millionaires. They did the same in Flathead lake in Montana. They also took the best views of the Tetons in Jackson Hole. And just look at Aspen. I am sure that you can understand that this crowd is not interested in living in Anaheim even though they may have made their money there. They certainly would not even consider Columbus, Ohio or Flint, Michigan.
Everyone needs to relax and look at the big picture. Markets are irrational in the short term, they over react and things go up too quick and I'm sure there will be an adjustment and some things will come down quick. But if you are honest and look at the long run trend of desirable areas such as Santa Barbara they completely out perform and will continute to out perform. There are a great deal of boomers hitting the golden age where they want climate and culture that you can get in SB that certainly doesn't exist in Ohio. And none of them make money in SB, most are done with that stage of their life. Anyone who wants to be taken seriously in the discussion should not pay too much attention to this median income story. Do you honestly think house prices on SB are going to ever get in line with median income? It's a bogus statistic that has never worked in high demand areas, and never will. But it makes great headlines. Yes, things may correct for a year or two, I've seen it in the mid 90's. But job growth was very negative then and now the state CA EDD is projecting 300-375,000 new jobs for CA in 2006. Jobs always trump rates, headlines, etc. Anyone looking at buying a house to live in for the next six to ten years (real buyers, not flippers) may find a great opportunity this year or next as panic sets in to the short timers.
What will happen to SB real estate if a big quake hits CA? Hmm...
WOW! A lot of hate towards Ohio!
But that's OK - I live in Columbus, I hate it, and am currently planning my exit. Ohio has become a real shithole. Just this past Sunday, the Columbus Dispatch (newspaper) had a front page article on the state of the OH economy. We're at the bottom, folks, as far as job growth, job opportunties, tech, etc.
There *are* people here doing very well - all you need to do is look in New Albany (NE part of Columbus), where lots of Limited Brands executives live in their multi-million dollar McMansions. They're the most overpaid group of non-productive crooks I've ever seen. The Limited's secret motto is "We don't pay people to work, we pay them to live here." Afterall, what the hell is Columbus in the bigger picture of the fashion world?
In closing, forget Ohio - this State was written off long ago. I'll be sure to turn off the lights when I leave later this year...
The interesting thing about earthquakes in California is that they create their own little economic boom. All that outside money flows in to fix it up and stirs up the local economy. But what about Detroit or Cleveland or Buffalo (big snow dumps don't count!)? Where is their hurricane or earthquake to trigger mass inflows of funds? The mayor of Detroit said that they were in just as bad shape as New Orleans but they arn't getting the huge FED funds flowing in.... the same goes for Gary, Indiana..... another forgotten city with cheap housing if you can stand to live there!
By the way the beauty of Santa Barbara's buildings was set into code following the 1927 earthquake which knocked down most the brick building facades. For reconstruction they decided to with their current Spanish/Mediterranian motif... reinforced of course!
I think everyone is arguing about something very subjective: is Santa Barbara a classy, upscale place that commands high prices for it's real estate? I think what the CNN article was saying is that real estate prices are 86% higher than their fair value. I would think that they calculated the fair value with these market characteristics factored in. So maybe the question is will SB see a surge in classy upscale-ness of 86% in the future?
What if a meteor hit the earth or we had another ice age? You can live your life worrying about the what if doomsday scenarios but that won't get you too far or be a lot of fun. I was born in Canton Ohio and raised in SB I can speak legitimately about both; SB is worth every penny. Anyway, I enjoy all of your points of view, great to live in America. Good luck to each of you.............
I live in Ventura County and have spent a fair amount of time in Santa Barbara, which is inhabited by rich old people who don't worry about housing bubbles or job markets as much as sunny beaches and quiet streets, as well as service industry workers who live in multifamily shacks next to the freeway. Oxnard, 30 miles to the south, is more overpriced than Santa Barbara if you consider the quality of life issues. Oxnard has had a huge run up in the past few years and is nearly as expensive as nicer areas even though it has terrible schools, few well paying jobs, almost no rich retired population, poor air quality (port, diesel fumes, power plant, the beaches literally stink), high crime, and has become overbuilt as cheap agricultural land surrounding it has been filled in with tract housing. Santa Barbara has a unique flavor and, like San Francisco, a large percentage of its inhabitants will live there no matter what the cost. The area is not substantially overbuilt like much of Ventura County and Riverside County. Most of Western Ventura County will see a bigger correction than Santa Barbara.
Few would disagree that Santa Barbara is a nicer place to live than Canton, OH. The point is that Santa Barbara is 86% overvalued. The article is not comparing regions, it's comparing price values in regions.
But don't worry. The rich, old people will save the day.
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