Posted on 04/30/2013 7:31:38 PM PDT by SeekAndFind
Home prices are rising at levels not seen since the real estate boom, but American homeownership remains on the decline.
The two trends underscore the nature of the housing rebound: Gains in pricing have been driven significantly by investors, leaving many would-be buyers behind.
Prices are rising because of strong demand, a lack of supply and a sharp recovery in the hardest-hit markets. The number of foreclosed homes coming to market has also dropped dramatically. But because lending standards remain tight, the everyday home shopper is often losing out to investors able to pay cash.
"What we are seeing right now is definitely not normal," said Jed Kolko, chief economist for real estate website Trulia.com.
The number of homes for sale has not only been constrained by the drop in foreclosed properties. The low level of building over the last several years also has diminished supply, as has the fact that many borrowers remain stuck underwater — owing more on their homes than the market value — and are unable to get the prices they need to sell their homes.
The Standard & Poor's/Case-Shiller home price index of 20 American cities rose 0.3% in February over the previous month and was up 9.3% over February 2012. It was the ninth consecutive annual increase in the closely watched index and the best annual improvement since May 2006.
A separate report by the Census Bureau showed the nation's homeownership rate hit 65% in the first quarter, a decline of 0.4 percentage point from the prior quarter and the same quarter last year. An increase in the number of rental properties, tight mortgage-lending standards and stiff competition among investors have made it tough for average buyers, analysts said.
"Although there are some signs that conventional, mortgage-dependent buyers are playing more of a role
(Excerpt) Read more at latimes.com ...
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In Texas property owners can apply for a homestead exemption and, if over 65, another exemption which allows for some relief from rising property taxes. Unfortunately, the schools keep wanting more money so those of us who are older are finding that the assessed value of our real estate keeps going up every year and the tax bill keeps increasing.
Some people don’t understand this and keep thinking that their house is actually worth more on the sales market. Not true - just a shell game.
competition among investors...
Bingo. Where ever there is a fracking boom (like where I live), investors are buying up property like crazy. The Fed is ruining all other avenues of investment so inventors and investor groups are buying up homes for rental property. In most fracking areas, the boom will last approximately as long as the depreciation allowance for the rentals. Many investors are working with realtors and most of the houses are sold without even hitting the market. But like all bubbles ......
Home prices are rising at levels not seen since the real estate boom, but American homeownership remains on the decline.
The low level of building over the last several years also has diminished supply, as has the fact that many borrowers remain stuck underwater — owing more on their homes than the market value — and are unable to get the prices they need to sell their home
If I didn't know how fair and unbiased the LA Times was, I'd say they were cheer leading for the regime. Sounds like they're gearing us up for Recovery Summer V (or is it VI, I've lost count)
Let's see a trend before we start jumping up and down.
Looks to me like this is another of those "prison populations continue to rise even as crime rates are going down" BS stories.
As I have said before, this is GIGO (garbage in, garbage out) reasoning. Here is another headline that be written, using this logic:
DOE Data For Last Winter: In-Home Temperatures Show No Change Even While Consumers Forced To Spend Billions On Gas, Oil Heat
It is called a dislocation. Read your history. It is not a good thing.
/not directed at Freepers
A year and a half ago, I bought my home in LA before it went up for sale. Two week escrow.
Homes in my neighborhood are booming! A lot of cash sales, multiple offers and very short escrows.
>>>Home prices are rising at levels not seen since the real estate boom, but American homeownership remains on the decline.<<<
Economists calls it inflation (devaluation).
Yes, same here!
the dollar is shrinking
things measured in dollars require more dollars to measure the same value
this isn’t rocket science.
the markets will also continue to climb... as long as people value the companies.
BUT... at some point, the money people have to spend will not keep pace... and deflation will start to set in.
at that point, hold onto your hat
With apologies to Mr. Shakespeare: Bubble, bubble, toil and trouble....
Investors from foreign countries come in and pay cash. People with decent jobs and good credit cannot compete because a cash deal is more attractive and less hassle for banks and private sales. Left over less attractive property values are inflated because there are limited choices for normal people looking for primary residences. Why do we allow foreign groups to come in and scoop up homes? It is not good for America. It is scary, just like so many unbelievable things that are swept under the rug by the hour!
Kind of like “Potterville” from the nightmare vision of “It’s a wonderful life”. Eventually Potter owned the whole town, and everyone became his slave.
You can go to a bank, get approved for a loan and have the money three days after you are approved. Then go house hunting with cash.
“...finding that the assessed value of our real estate keeps going up every year and the tax bill keeps increasing.”
This was happening in Michigan many years back. I think it was in the 80’s. People who owned property, particularly waterfront property, were losing their homes because they could not pay the ever increasing outrageous property taxes.
I recall several consecutive years of double digit increases in my property taxes. It seemed that every year the increase was larger, 12%, 16%, 20%. People finally tired of the increases and passed the Headlee Tax Limit Bill, which limited the allowable increase to 5% or the cost-of-living increase, whichever was lower. Passing that law was one of the smarter things the people of Michigan ever did.
The bill was developed by Richard Headlee. I believe he was a businessman, but I could be wrong about that. A similar law might help in your state.
Let me rephrase this for you. If someone wants to buy a house a large number of foreign investors with money increases prices and is a very bad thing, requiring laws to prevent it from happening.
Now look at this from the other side: If you want to sell your house a horde of flush foreign investors with cash is a very good thing. In fact the government ought to subsidize these wonderful foreigners.
There are also US firms doing it. It would seem to me one should be wary of buying in or near such neighborhoods if one has lofty expectations. If investors decide to hit the sell button, home values would likely fall. If they decide to hold on for the long term, there goes home values. Investors aren't going to do any upkeep on the properties that is more than necessary. If mortgage rates increase substantially, there goes home values.
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