Real estate expected to flounder yet another year - US

Sleeping with the fishes?
Real estate expected to flounder yet another year
By Staff & AP Reports
Article Launched: 12/30/2006 07:31:22 AM PST

"The nation's house party ended with a thud in 2006, leaving everyone from condo flippers to Federal Reserve chairman Ben Bernanke waiting to see what would happen next. The sudden stall in home sales, home construction and home prices - and what that will mean for the economy - was voted the top business story of the year by U.S. newspaper and broadcast editors surveyed by The Associated Press. "Full Article.

Real estate expected to flounder in 2007
RACHEL KONRAD, The Associated Press

Donald Anthony has slashed the price on his four-bedroom, two-bathroom house by almost $80,000 — and added $40,000 worth of improvements, including a new kitchen and landscaping in the leafy yard."

"He's used three different agents. He's listed the 1,800-square-foot home — an immaculate ranch on a quiet cul-de-sac — on for-sale-by-owner sites, in newspapers, on cable television and community site Craigslist. He or his agents have spent at least 50 idle afternoons hosting open-house events."

"But the 74-year-old retired physicist cannot unload the house, now listed at $489,950 — well below the price of comparable homes in the fast-growing region between San Francisco and Sacramento." Full Article.

House Hunting.

Today I decided to look at a couple of houses. I had a moment of weakness where I felt I should just buy a home and get back into the market.

After seeing some of the overpriced fixer-uppers out there I can tell you that I am even more resolved to stay the course and wait it out.

I was talking to one of the neighbours in a potential neighbourhood that I was looking in. One thing she said stood in my mind, "I believe housing is going to bottom out. Who will buy these houses at the prices they are being listed at? Who can afford them?"

I would love to buy a house right now. I like being a home owner, but I get such a sick feeling when I see some of these homes....... that I just can't do it.

The Alberta boom has its drawbacks

Growing pains

"CALGARY -- People in boomtown Alberta who hope to grab a cab to that party this holiday season had best start hailing ahead - by about three days. "

""I was told that if we didn't book, we might not get one," says Tim Richter, explaining why he began calling around on a Thursday for a taxi to take him to his Calgary-based company's party on a Saturday night."

"When I called them, they said the cab could be on time or it could be an hour and a half late - they couldn't guarantee the time." "

"While there are jobs a-plenty, the cost of living has soared. Office space and parking in downtown Calgary has eclipsed Toronto as the most expensive - and hardest to find - in Canada. "

Canadian economy blew hot and cold in 2006

"Hope you enjoyed the economy this past year: 2007 won't be any better and could be noticeably worse as observers forecast a significant slowdown from activity that has been becoming increasingly sluggish in recent months." Full Article.

Existing home sales rise, prices fall - US

Existing home sales price drops, sales are up; weak market shows signs of firming.

"median price of a home sold in November was $218,000, down 3.1 percent from the $225,000 in November 2005."

"While month-to-month prices are somewhat volatile, year-over-year declines in home prices are relatively rare and are seen as a significant sign of weakness in the real estate market. Until it occurred in August, there hadn't been such a drop in 11 years"

"Wachovia economist Phillip Neuhart sees the mild increase in sales as a firming in the foundation of the housing market"

"But Jeoff Hall, chief U.S. economist for Thomson Financial, told CNNMoney.com that the market hasn't hit bottom yet."

Has the US Housing Downturn ended??

Over the last couple of days this seems to be the housing topic of choice for the media. The numbers show a minor, 0.6%, increase in month to month home sales, even though YOY sales are still down 10% from 2005.

ROBTV just had an economist,1:45 PM EST, from BMO telling us that US housing has hit bottom and is on its way up and the National association of realtors® is all over it as well.

November Existing-Home Sales Rise Again

I am still skeptical. I feel it is the Housing Industry Cheerleaders trying to get buyers off the sidelines. The numbers are not strong enough to start saying there is a change in the market.

It is quite well known that builders have been offering generous incentives to sell their inventory. This isn' t shown in the pricing so the stats look better, even though buyers are recieving a better deal. I personally don't believe the free upgrades have the monetary value they claim, it still attracts buyers.

I am expecting there to be more trouble next year when Listings increase in the Spring. This will bring more competition and builders will need more than fee appliances, landscaping, and vacations to sell their houses.

"Home sales have hit the brakes" - US

Home buyers and sellers must break stalemate for sector to move beyond post-boom doldrums.

"The housing market isn't dead, it's stuck.There's a standoff between home buyers and sellers, and the health of the 2007 housing market may depend on who blinks first."

"He and others say it's more of an irrational resoluteness, with buyers and sellers staring each other down: Sellers are clinging adamantly to too-high prices, and buyers are equally adamant about getting a bargain."

"As that impasse has formed, home sales have hit the brakes." Full Article.

Canadian Provinces Competing for Labour.

Alberta has a couple of provinces looking to take back their residents. They have started negative add campaigns pointing out the price of housing, long commutes, and even the line ups in donut shops.

With a thriving Sask. economy, premier calls ex pats in from Alta. pastures

"REGINA (CP) _ If you‘re a Regina native stuck in a merciless Calgary traffic jam on the way home to your cramped suburban duplex or a former Saskatonian who can‘t get a cup of coffee at an understaffed Edmonton doughnut shop, Saskatchewan Premier Lorne Calvert wants you." Full Article.

Maritimers in Alberta seek jobs back home

"An advertising message suggesting homesick Maritimers in Alberta return home has resulted in thousands of inquiries about East Coast jobs.
About 300,000 copies of a glossy insert titled Come Home went out with Alberta newspapers two weeks ago. The supplement profiled Maritimers who returned for jobs in skilled trades, health care and IT." Full Article.

Saskatchewan hopes 2007 will see the return of many prodigal sons and daughters

"Saskatchewan hopes 2007 will see the return of many prodigal sons and daughters carving out a living in Alberta" Full Article.

Renting? Waiting for a Housing Decline before you buy? You may like this article.

Renters gloat over housing slump. - US

Some who missed the boom are feeling vindicated now; resisting 'nesting instincts'.

"The housing slump has been painful for millions of people who work in real estate or recently bought a house."

"Dean Baker, an economist, sold his condo during the housing boom and now is renting an apartment for about $2,300 a month. Now, with the housing market in a slump, renters who sat out the boom are finally getting some satisfaction."

"Now that the housing market is slumping, "I feel vindicated," Mr. Jackson says. "But I'm not looking forward to the coming recession." He believes that the housing slowdown and the effects of "a mountain of debt" on consumers will pull the entire economy into a slump."

Lessons to be learned, South of the Border?

I ask you this, do you think what is going on in the US Housing Market is relevant to us here in Canada? Should we be looking to what is going on there to forecast the future of Canadian Real Estate?

All you have to do is a search and you will see countless News Articles, Blog Sites, and Economists talking about the Housing Decline in the United States.

What makes us different in Canada? What makes Canadian Real Estate different than that of the US Market?

We have experienced the same increases in housing prices the last couple of years. So why is it different when it comes to a decrease??

Keep an open mind and read all that is out there. Don't just listen to Real Estate Professionals that have an interest in you buying a home.

Learn from those that bought in the height of the Real Estate Bubble and now can't sell for what they purchased for. Look at the individuals that bought from Bulders and are now seeing that same Builder trying to sell existing inventory for far less than what they paid only a Year ago.

We may not see the same declines as they have, but are you willing to take a chance with your hard earned money? Are you ready to put it down and watch it evaporate as prices come back to their inflationary normal levels?