How is your local housing market doing?
Joshua D.Pro Member
BiggerPockets Founder · HI · Member since 2008 · 16k+ posts · 5k+ votesWhile the nation struggles through a housing crunch, there are many markets that continue to do well, despite the rest of the country. I thought it would be interesting to see how some local markets are performing.
Please share with everyone your local housing market is performing.
Tell us your:
Local Market (city, county):
State:
Status of current housing market:
Lets get a better feel for how real estate is really doing!
In a nutshell, residential sales volume is down, but prices rising, although at a slowed pace in most areas.
Rental rates have dropped slightly, and there is much more availability compared to a year ago.
Here's the most recent Honolulu Board of Realtor's stats:
http://www.hicentral.com/hbr-stat.asp
As a Partner in the GC-GOLD Construction Lending consortium with primary markets extending from the Mid-Atlantic States, the S.E. and selected S.W. markets I have to say that we have seen NO reduction in requests for const-to-perm financing from those who want to engage in the construction of a CUSTOM-built home as a primary residence or a 2nd/vacation home when completed.
From that perspective alone... "What crisis?"
Obviously, in terms of the "Big Picture" there has been a crisis of secondary market confidence with regard to the enormous increase in borrower delinquencies and pending or actual forecclosures which has led to a major culling of the ranks of wholesale mortgage lenders... now probably close to 125 lenders who have closed up shop within the past 5-6 months.
Actually, many of those lenders were little more than "Super Brokers" in that they relied upon warehouse credit lines or correspondent relationships with "Big Brother' lenders.
It's somewhat analagous to our belief in the notion that a $100 bill is actually worth $100. So long as we all believe in that value-concept all is well. What happens when we go to spend it and are informed that "Sorry Jack but that is only worth $50 today or, worse yet ZIP?
Lenders have found themselves carrying a bucket load of mortgage Notes that they couldn't find secondary market buyers for and/or were faced with "buy-backs" on Notes previously sold that went into default within their first 12 months. A very high percentage of Buy-Backs caused by the approval of a loan to a borrower who was either very marginal (at best) or who had lied on their original application about their income.
The "insanity" of the market place outran itself, as it ws bound to do. The only question was "When?" That question has now been answered in very bold headlines and already the "smart minds" have removed themselves from the blame-game. Wisely so because, to varying degrees of culpability, EVERYONE can bear some responsibility for the core problems.
Those now maligned "Hi-Performance" exotic Pay-Option and ARM loans with low teaser starting rates became widely promoted and sold to folks
who had no business using them. A bit like handing a High Schooler with a new provisional driver's license the keys to a highly tuned sports roadster. An accident just waiting to happen!
Real estate markets that are located in areas of stable and growing employment will suffer much less than others with less favorable economic conditions. While even these "star" markets will be working their way through a period of price adjustments or a lengthier listing period at least their core fundamentals are sound.
Those home owners who are unable to pay their upwards adjusted mortgage payments and who have not been able to re-negotiate their loan terms with their Note holders will assuredly become "tomorrow's renters".
It's already started in many areas... rental availabilities are rapidly shrinking = a strong potential for investors willing to build SFRS for rental or for "sale" under Lease with Option to Purchase contracts, 2-4 unit multi-family and new apartment complexes.
In Myrtle Beach and parts of Charleston (SC) developers of recently completed condos are now replacing unresponded to FOR SALE signs with "Lease with Option to Buy" signs and are now actually seeing evidence that strategy is WORKING.
Savvy real estate investors are targeting "spec" builders with unsold inventory that has become a "money drain" in terms of interest carry and are buying SFRs for 10% - 20% below actual cost to complete. Tnen immediately renting them out or installing a Lease Option to Purchase "buyer".
A major benefit to the recent "Correction" is that for the most part the SPECULATORS have vanished. The conditions are now perfect for investors... and also, have never been better for PROPRLY QUALIFIED home buyers.
97% FTHB mortgages are still available for those qualified for FHA Programs... 100% FULL DOC mortgages are still available for those with mid FICOs 660+ ... 90% SIVA mortgages are still available for those with 680+ / 700+ mid scores.
"High Performance" exotic JUMBO and SUPER JUMBO loan options will still be available to those who can GENUINELY be qualified for them.
In my market in Mid-Michigan the actual number of sales are up about 10% from last year at this same time but the average sales price is down about 10%, mainly stemming from a large number of the sales being from reo properties. selling way below the market average. And I cannot say that I have helped things I have bought 8 reos this year myself. :roll: But I am still fixing them up and selling them the thing is I am planning a hold time of 8-12 months when I purchase these and just factor it into the initial purchase price.
The Denver Post had an article in todays paper with a very impressive and detailed map. I'll put in a link though I don't know how long it will last.
Have patience, their web site is not the fastest.
The summary is that low priced neighborhoods, prices under $250,000, have seen declines in values and have been hard hit by foreclosures. Higher priced neighborhoods, homes over $500,000, have seen few foreclosures and some appreciation.
Jon
In my immediate area, things remain very strong. To specifically answer your request:
City: Mountain View
County: Santa Clara
State: CA
Status: Inventory is low and sales are very hot
Of course it's all neighborhood/city dependent as with any other area but houses in our area are still selling in under 10 days over asking price with multiple offers and we're talking typical asking prices in the $800k-$1.3mil range. I think overall, the Bay Area remains strong as the tech companies are doing well but I really only see what is happening on the Peninsula. Any desirable property, especially in a good school district, gets swallowed up very quickly. I think the East Bay has been weaker, at least in some areas (James could probably validate that) and I have no idea how SF is doing.
Sorry, it's all anecdotal as I don't really look for detailed reports on how things are doing.
Local Market: Louisville metropolitan area
State: KY
Status of current housing market:
Traditionally, my market is like a "savings account" compared to other real estate markets across the country. We don't see huge swings of appreciation, but we don't see the big downtimes either. For the past 40 years, we've averaged between 3-5% appreciation per year.
Here are some numbers:
Sales Jan 2006 – July 2006
Houses Under Contract 10042
Houses Sold & Closed 8811
Average Selling Price $172,273
Median Sales Price $138,500
Sales Jan 2007 – July 2007
Houses Under Contract 10213
Houses Sold & Closed 8998
Average Selling Price $173,845
Median Sales Price $139,900
% Change from 2006 to 2007
Houses Under Contract 1.7% Increase
Houses Sold & Closed 2.1% Increase
Average Selling Price 1.0% Increase
Median Sales Price 1.0% Increase
While it doesn't represent a complete picture of the market, it at least shows some indication of strengthening.
The number of total properties on the market is still relatively heavy compared to several years ago - but at least the rate that they are coming off the market is starting to increase.
Generally speaking, partially due to the media frenzy about the "disastrous real estate market" - its still a good time to buy investment properties, or move up from your existing home.
Its generally not a good time for a lateral move, or downsizing.
Our market is full of inventory. Buyers are all on the fence because they are waiting for homes to be reduced once again. Many Realtors are not pricing their listings to sell because consumers are in denial on how much their home is actually worth.
Foreclosures are EVERYWHERE and investors are truly taking advantage of that. It seems very few buyers are actually making any moves because they are simply waiting for more reductions.
Investor Champ tells us that the market is uncertain, foreclosure all around and deals for investors. He lists his location as the Bay Area CA.
T-Bone77 tells us that the market is strong, average days on the market is short and prices are high based on national averages. T-Bone77 notes that he is talking about the Bay Area of CA but is mostly focusing on the Peninsula and specifically references Mountain View CA rather than the full Peninsula.
I lived in the SF Bay Area. It is hard to tell just what the two are talking about other than to say the SF Bay Area is a large place. South Bay, Peninsula, SF, Marin County, East Bay and other areas all seen as part of the Bay Area.
I have even heard a few people in Southern CA calling a place done that way the Bay Area though most people would not do that in CA.
So, do we have reports from different parts of the same SF Bay Area or just reports based on two different perspectives?
At some levels I do not really care if there are multiple views. I do want people to notice that there can be a lot of perspectives. Some are of the type glass half empty or half full. Others are of specific areas that appear to be close by when the market behavior is not at all alike.
Like the headlines that claim the US has a housing crash when some wonder why the boon never arrived and others see prices being up by 10% this year.
John Corey
Exactly the conflict that I saw John and after digging a little deeper, it appears that Investor Champ hails from a little different area than I. While I don't want to speak for him, I think he's in the East Bay which I believe to be on the soft side as I mentioned in my original post. I really don't know that area at all nor am I in the real estate business so of course he could represent much better than I.
In terms of my area, definitely Mountain View *in the general price range that I noted* continues to be very strong. Other towns nearby that I believe to be strong include Palo Alto, Menlo Park, Los Altos - these are always desirable areas on the peninsula. I'm less in touch with other peninsula towns and I'm really out of touch with the San Jose and San Francisco areas.
I guess what all that says is that since I'm not active in my area, I only know my very immediate market by osmosis and have a small idea of some other local communities via the news.
T-Bone77,
No problem with what you reported.
My point is the market can be very local. As you noted the property market is pretty much tied to employment. Strong employment and you see good house prices. Bad employment you get a declining population and falling prices (not in that order).
Look at Buffalo NY and Dayton OH. Both had populations that peaked and did so back 20 to 40 years ago. Neither have strong employment so they have house prices below the norm. One city has lead the nation in foreclosures during what most people called the US housing bubble years. The other has lead at other times.
I was mostly pointing out how two people can report two markets that are within driving distance and the markets are rather different or are perceived to be so.
John Corey
Dalton, GA Whitfield County
Its slowed down quite a bit for retail selling. It doesn't help that our town is heavily relient on the carpet and flooring industry. Those industries are also slow now and have cut jobs at a couple of the companies and i think thats contributed to the slow down here.
I'm owner financing many of my properties at the moment.
From what I have seen and read the reason the market is strong is because the market and more broadly the state had a rough patch during the last recession. It was more confined to a number of cities with factories that closed but even Charlotte felt the drafts. The recession was tied to the 9/11 and dot.com events so the local banks who operate nationally and internationally were impacted a bit.
Charlotte is similar to Portland OR and Seattle WA in that it sort of missed the boom so the market is healthy now. Raleigh NC is anothet that pops up on the list. Places with high tech or banking.
John Corey
I agree with your assessment. Charlotte is, however, starting to feel the impact of the mortgage meltdown. With guidelines as tight as they are, many sales are falling through. I've been hearing this alot from my clients in the last 45 days. I give it 30 to 45 days and the lenders will ease up enough to get these deals done. Other than that, Charlotte is still strong.
Do not bet on it. The lenders really can not afford to relax the standards.
The rates are set by the wholesale market so the lenders can not do anything about the rates.
John Corey
Hi REI,
Nice to make your acquaintance. They are talking about two different parts of the Bay Area. It is true that some areas are still red hot. The fortunate brokers in those locals are figuratively asking, "what market change?"
Other areas that were red hot have now stalled. Mind you, we aren't talking the difference between SF and San Jose. What I am describing is happening now in San Jose and the immediately surrounding cities.
The big driver in the hot areas (aside from tech) is the school systems. Certain segments of the population place an extremely high value on it and will do what it takes to get into a home in a school zone with ultra high scores. This is endemic not just in the San Jose area.
A colleague of mine was sharing just today that he has a listing in Fremont. It is in a good (not great) school zone where scores are in the 840s. Homes just a half mile away in a great school zone with scores over 900 are seeing more activity and higher prices.
Hope this helps!
Mark.
Welcome neighbor!
Depends... in some neighborhoods "Yes" and in others "No." :wink:
Thank you for the "welcome."
Cheers,
Mark
My agent sends me listings. Today I got one for a house I made an offer on in Feb 2007. Then, it was listed at $200,000. I offered $162K, they came down to 180, but I couldn't go that high. Today, 8 months later it's listed at $170K, and now that I've spent some money on a new roof, ceiling, and garage door, that's still too high.
I like the hosue and the location. Maybe in a few months...
Sorry answered twice.
Paradise--
The highs:
http://www.honoluluadvertiser.com/apps/pbcs.dll/article?AID=/20071111/BUSINESS04/711110340/1071
The lows:
http://www.honoluluadvertiser.com/apps/pbcs.dll/article?AID=/20071111/NEWS01/711110351/1001
Southern California Market
High Desert area - Victorville, Hesperia, Apple Valley
The market is tough... prices have dropped considerably, inventory is extremely high. $249,000 for a 2602 sq. ft. home... just listed... great for investors looking to purchase large quantities of homes for inexpensive price per square foot.
The market here right now where I'm at is LOUSY!!!! And I LOVE it.
Everyone's going into foreclosure and banks have a glut of property that they can't move. However, people still need a place to live and have to rent here. I'm getting houses for 20-30 cents on the dollar. Working on a 3 flat right now that I bought for $25,000 and has gross rents of $1,400 per month. Average cheap house here is about $8,000.00 and rents for about $4-500 per month.
Where exactly am I? I'm never gonna tell. :D :D :D
I will tell you though that mini-markets like the numbers I'm getting are on the outskirts of every major city I've looked into, with the exception of LA.
The housing market in the Cincinnati and Northern Kentucky areas have slowed down rather significantly. There is currently a glut of condominiums on the market in both the Cincinnati riverfront and downtown areas as well as the riverfront areas in Northern Kentucky. We have the Ascent in Covington, Southshore in Newport, Harbor Greene in Bellevue, Adams Landing in Cincinnati, River Pointe in Cincinnati, which hasn't even broken ground, and a whole slew of condos in the downtown Cincinnati area. This actually is great for buyers as we have a bigtime buyers market here. Not only for condos, but also for single family homes as well. If I can be of any help to anyone looking to either move to this area or move within this area, I am licensed in both Ohio and Kentucky. Sandy Bakst - Re/max Preferred Group - 513-315-9295
In Portsmouth, Rockingham County, NH,
1) Sales are slow but happening
2) Prices are down but seem to have bottomed
I continue to believe in "Following the jobs" - which are in a similar state here.