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Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: X Y Zebra who wrote (48399)	10/24/2003 2:36:15 PM
From: X Y Zebra	Read Replies (1) \| Respond to of 57110

Ah... the crystal ball... car.org C.A.R.'s California Housing Market Forecast for 2004: Record-setting run-up in median home price to continue, sales to moderate from record levels this year To view the PowerPoint presentation click here. SAN DIEGO (Oct. 2) – The median price of a single-family home in California will reach a new record again next year, while sales will decline from this year's record setting pace, according to the California Association of REALTORS® "2004 Housing Market Forecast" released today. The median home price in California will increase 13.0 percent to $414,100 in 2004 compared to $366,450 this year, while sales for 2004 are projected to reach 548,500 units, falling 4.5 percent compared to 2003. The double-digit gain in the median price of a home, which California has experienced for the past 4 years, will again be fueled by the continuing shortage of housing across much of the state, according to C.A.R. economists. California typically gains nearly 250,000 new households, yet only will build about 190,000 new housing units this year, creating a shortfall of about 60,000 units. "While mortgage interest rates will remain near their historic lows next year, it won't be enough to mitigate affordability concerns in most regions of the state," said C.A.R. President Toby Bradley. "Housing affordability in California will continue to be negatively impacted by rising home prices in 2004 and relatively slow growth in household income. "We expect C.A.R.'s Housing Affordability Index to fall 8 points next year to 19," she said. "At that level, less than one in five households will be able to purchase a median priced home in California. That's a cause for concern as we move forward." Home sales for California in 2003 are expected to reach a record 574,300 units, surpassing the prior sales record of 572,550 set in 2002, according to C.A.R. economists. "While the torrid pace of home sales will moderate next year, 2004 will likely be the third strongest housing market in the history of the Golden State," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "Southern California and the Central Valley have fared better economically in recent years than the San Francisco Bay Area, so it's no surprise that their respective housing markets have outperformed those in the Bay Area," she said. "Even so, the Bay Area median price remained the highest in the state." "Continued strong demographics suggest that 2004 will be yet another robust year for real estate activity in Southern California and the Central Valley," Appleton-Young said. "The success of the housing market in the San Francisco Bay Area is closely aligned with the performance of the technology sector." Appleton-Young will deliver her highly anticipated forecast today during C.A.R.'s California REALTOR® EXPO 2003 in San Diego, Calif. The convention and trade show attracts more than 7,000 attendees. The California Association of REALTORS® (http://www.car.org) is one of the largest state trade organizations in the United States, with more than 130,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles. car.org

To: X Y Zebra who wrote (48399)	10/24/2003 3:25:38 PM
From: MulhollandDrive	Respond to of 57110

am not too sure that the "immigrant" population is all low income... there are two sides to this... there is the first generation immigrant and then there are the subsequent generations with a lot higher education levels than the first wave... in the SW USA there are a number of "waves" of these immigrations and they have a few generations within, which are getting more and more educated.... i suggesting "all" immigration constituted low income workers, but i was referring specifically to s. ca where i think we can agree the majority of the influx of immigration that is pressuring housing supply would be obtaining jobs on the low end of the economic scale... and yes i did note that the $90000+ figure was of combined income, but please also note that there is $81,000 downpayment assumption, totally unrealistic for a first time buyer imo...to be sure lax lending standards have allowed for little or no downpayments....but the point of that article is they way i interpret it ...that assume for a moment the first time buyer doesn't have the necessary $81,000 downpayment, and btw, also assume that both income earners didn't get a combined 12% pay increase raises (notice the jump in income requirement from $82150 to $93490?).... those assumptions would mean that the median price of housing in s. ca are already priced out of the reach median wage earner...frankly i don't buy for a minute that the average first time buyer has the requisite 80 grand plus associated costs and fees ...they are getting a LOT of help by means of programs such as getdownpayment.com sort of reminds me of the incentives being thrown at the automotive consumer... Now... everybody bitches about the "low" savings rates in the US.... would it be possible to consider that... buying a home and paying all that interest actually constitutes the "American way" of "savings" I mean, after all... it is said that the largest investment most families will make is that of a home ?... i disagree with you here z... taking on mortgage debt does not constitute savings. furthermore fewer and fewer americans are amassing savings for downpayments essentially the reason i disagree is that while over time a person can accumulate equity through paying down mortgages and/ or property appreciation. the fact is you still have to live somewhere. in other words it's not cash (savings) until you sell. and then you still have to live somewhere, so unless you downsize significantly any appreciation you have on paper is just that. it's only when you convert the appreciated value to cash that it can actually constitute "savings".... Even without this worry, there is reason to expect homebuilding stocks to cool down going forward. Our homebuilding model has peaked, underscoring that the phase of blowout profit estimates that this group has been posting is cresting. Fortunately, value is still good and a better job market means that housing activity will stay firm, so this group is unlikely to suffer much in relative terms. Still, only a neutral weight is recommended. yes...i am agreeing, but the caveat here is "a better job market".... not sure what that means in the current environment...meaning the bleeding of jobs has been staunched ? or new jobs are being created sufficiently to keep housing on a solid footing. (starting to see some glimmers of hiring here and there but it still appears the losses are outnumbering the gains) my other point was that i'm not sure that even in a "neutral" housing environment, we should take a sanguine attitude toward the economic recovery. in other words ....would a neutral housing market be enough to help sustain spending just as the hot housing market was credited with saving the economy from a deeper recession? if so it seems like we're trying to have it a little bit both ways here. i suppose there really is no way to quantify just what kind of "wealth effect" from housing appreciation has been working its way through the economy as an offset to the equity market losses, job losses, and increasing consumer debt. Is it possible that the "service" jobs created to take care of the needs of these populations is sufficient to create a viable economy on its own right ? one thing i find worth watching right now right now is the grocery store worker strikes especially in s. ca.. basically they striking because they are saying the cannot afford the extra $5 per week for health care...and these are the same people who are beating down the doors to buy the $400k+ homes starter homes??? maybe they're not feel so wealthy after they cut that big check month after month to wells fargo.. that extra five bucks seems like a real budget breaker<g> :)