Housing is waking up to a new Hangover....

3 Replies

http://www.msn.com/en-us/money/realestate/housing-is-waking-up-to-a-new-hangover/ar-BBaLZwQ

Thanks for your post. The article has a similar somber tone like what we've been hearing lately.

Since the run up in 2013 was quite significant, maybe we are just generally out of fuel. Interest rate is still very low, and a few days ago we learned that FNMA is starting to buy 97% LTV loans again. So the government is probably seeing the slowdown as well, and trying to push it forward.

David, In terms of general local economy, what do you see over there in Central PA? 

Here in Bay Area, economy seems to be quite healthy still. Startups are still getting funded left and right. Most consumer market startups are gravitating in San Francisco area, instead of in the traditionally known Silicon Valley cities. That explain the crazy increase of home price and rent over there.

BP-ers, How's your local economy look like?

Originally posted by @Ezra Nugroho :

BP-ers, How's your local economy look like?

Here in Houston the economy has been on fire for several years, driven by the energy industry and, to a lesser extent, medical. Everywhere you go in this town you'll see cranes in the sky at construction sites for new commercial and residential high rises.

I've had a front row seat because my neighborhood is the new hot spot for developers. It's a close-in neighborhood developed in the 50's, and WAS known for mid-century ranches. The developers are buying everything they can get their hands on, tearing the house down, and building McMansions that are selling in the $700-$800,000 range. We've even had a couple of $1M+ houses sold recently.

Our housing inventory is pretty tight. I read the other day that the available inventory is about a 2 1/2 months supply. Houses are being sold almost as soon as they go on the market, and usually at higher than asking price.

Having said that, there is some concern about the recent drop in oil prices. If that continues, it could throw some cold water on the hot Houston economy and slow things down here.

@Fred Heller  is right. I am slowing down due to the concerns here in Houston. We are also not hearing the word deflation but its a concern no one is really talking about yet. This could be a major problem for over leveraged people if oil keeps falling. That is why I am sitting on the side lines waiting to see which way the wind will blow. I'm still praying for the best but preparing for the worst.  The real indicators I am watching for the Houston market are interest rates and oil prices. you can have all the people in the world move here but if there are no jobs... I don't want to be holding the bag! as they leave.

However, most likely there will be only a slight fall in home prices(if any) in the Houston area. Houston probably has hit its stabilization point as far as pricing now the issue will be inventory. The developers are here trying to make some money but there is a slow down in existing home sales(or at least on the northside of town). This could also just be a seasonal thing like 2011 and 2012.

We may just have to wait and see. Ask again in March!

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