Trade groups square off in 'banks in real estate' debate
NAR vows to protect consumers from 'high-risk' loans
(Inman News, June 15, 2005).
If the nation's largest banks become the nation's largest real estate brokers, home buyers will be much more likely to take
out high-risk, interest-only loans, the National Association of Realtors testified
today at hearings called by U.S. Rep. Mike Oxley, R-Ohio.
Builder confidence hits 6-month high
(Inman News, June 15, 2005).
Encouraged by continuing low mortgage rates and robust demand for new homes,
single-family home builders are more confident this June than they've been all year,
according to the latest National Association of Home Builders/ Wells Fargo Housing Market Index,
released today. The index rose one point to 71 in June, its highest level since a similar reading
in December 2004.
On with the show: There's plenty of bubble talk, but home builders remain exuberant at their yearly S.F. conference; today's buyers don't mind paying plenty for style (Kelly Zito, SF Chronicle, June 5, 2005). First and foremost on many minds was the B-word. Bubble. In fact, it took less than 90 minutes for the first reference to surface in the opening presentation, a tag-team discussion on national housing policy between two former secretaries of Housing and Urban Development, Henry Cisneros and Jack Kemp. While both downplayed the possibility of a large decline in prices, Kemp in particular called on Federal Reserve Chairman Alan Greenspan to keep the housing market in mind as the Fed moves forward with its much-telegraphed plans to raise short-term interest rates. emp and others worry that higher interest rates could choke off demand for housing and short-circuit an industry that has buoyed the U.S. economy during a volatile cycle.
Follow the Leader - Live large and make a profit by flipping real estate ata high-end golf resort. Maybe.(Forbes, June 6, 2005) Are we in a real estate bubble, where demand is driven not by need but by speculation? Possibly. But you can make money even during a bubble if your timing is good. In the past year Terry Bradshaw, the Hall of Fame quarterback, has bought two lots at El Dorado, a plush residential golf club in Los Cabos, Mexico, and several more at an exclusive development called Vaquero in the Dallas area. His plan is to build homes on each of the lots, then flip all but one at Los Cabos, hoping for a 30% or more return. A portion of the proceeds will pay for a clifftop vacation home for himself in Los Cabos overlooking the Sea of Cortez. The rest of the profit "will be dumped into more real estate projects," says Bradshaw, who is willing to flip the second Mexico property, too, if the right bid comes along.
Cleaning up when housing bubble bursts
(Kenneth Harney, SF Chronicle, June 5, 2005).
Double-digit, multiyear
run-ups in prices in dozens of markets in California, Florida, Nevada and along the Atlantic
coast are "much the same phenomena" as the tech stock market bubble of the late 1990s.
Shiller isn't making specific predictions about when or how severe the corrections will
be in these areas, but he is convinced the speculative excesses in at least some of them
will trigger downturns in real property valuations.
Foreclosures aren't for neophyte investors
(Robert Griswold, SF Chronicle, June 5, 2005).
Buying foreclosure properties is a competitive process fraught with pitfalls.
I seriously suggest that only the savvy and experienced real estate investor with the ability to
absorb some bad purchases get into this area.
Holding beats flipping - Speculators grab headlines, but long-term investors remain market drivers. (Realtor Magazine, June 1, 2005) Tales like this have been fueling accounts in the media that housing prices are being artificially inflated by speculators who, with little interest in the single-digit returns they can obtain in the stock and bond markets, have trained their sights on real estate. Armed with cheap money from continuing low interest rates, they’re buying up homes in hot markets such as Palm Desert and Fort Lauderdale, Fla., with no intention of living in them or of even holding them for a day longer than it takes to sell them for a substantial profit.
New Price Peak for Bay Area Homes, Near-Record Sales
(DQ News, May 16, 2005). Bay Area home prices moved up to another new high last month as sales remained at
near-record levels, the result of strong demand and flat mortgage interest rates,
a real estate information service reported.
Commercial Real Estate Market on Uptrack With Lower Vacancies
(National Association of Realtors, June 14, 2005)
David Lereah, NAR’s chief economist, said solid gains are forecast for commercial real estate through 2006.
“Even with a lot of new construction around the country, we are seeing healthy levels
of commercial real estate space being purchased, rented and occupied,” he said.
“As a result, vacancies are declining across the board – this is improving the
fundamentals for commercial real estate sectors into the foreseeable future.”