The housing "bottom" certainly seems to be here in the Central Florida area.

Of course, when rates rise again, we will see another price drop, but until then, it seems to be a seller's market here for sure. One Realtor told me her listings are getting between 5 and 15 offers these days!

I live within 15 minutes of 5 new home communities with active construction going on and 'sold' signs in the front yards of the new homes.

Word on the street is there are a lot of IT jobs in the pipeline in Orlando due to the new Medical City development and the medical industry in general. We are in the bubble, so folks are milking it while it lasts.

^ What year are prices like?

I think this is some sort of ploy by the realtors to get buyers off the sidelines as from what I saw- sales just about stopped

my personal friend down in socal declares on FB that she is getting multiple bids and "how nice it is for a change"

then my Realt***** up here proclaims on FB (he can't see her post) that he had a condo sell in 6 hours and seller can't wait to buy another property — glad to see the market come back

further, I notice that homes go on the market then come off only to come back on again.

Organic houses aren't budging and when I notice that even low end distress sales aren't moving either.

I think everyone just needs to admit that the FED has succeeded. Nobody thought they could re-inflate the bubble. But they did just that. The stock market bubble is back and the real estate market was never allowed to completely deflate and is now on it's way back. How long will it last. I think much longer than most of us think, in fact beyond many of our lives. Sure gas will be $10 a gallon, but the Sheeple will not care because their house will be worth so much.

I was waiting to buy a house when values got down to 4x median income. They never even got close. This whole market is a sham. There is still tons of shadow inventory and sales quantity is down. It looks like the people buying homes now, at least in my area (inland socal), are in the government business. By that I mean government employees, TPTF bank employees, and the medical industry.

"TPTF bank employees" - is that Too Pig Too Fail?

Eaglewwit
there is NO WAY they can create another housing boom
the financial structure does not exist
1% growth expected for Q1
China slowdown and Europe in a depression
don't fall for their propaganda and remember that nothing goes in a straight line

Right now Realtors are terrified of banks dumping their inventory on because they know it will pummel prices. Realt*****s don't have control over that.

I expect sale volumes to suck donkey dung and banks to try and sneak inventory on

Guess I mixed TPTB with TBTF

You would think one of these banks would see the writing on the wall and try to be the first out the door, but it seems like they all still believe the can is kickable indefinitely. So frustrating to see this get dragged out for years on end..

Hip, it is called collusion.

I agree that's probably happening. I'm just surprised that 5 years on we still haven't reached the 'every man for himself' moment yet. Surprised and depressed..

That is because the government is backstopping the banks. They don't have to worry. There is only one man in this game and his name is Uncle Same.

when the economics of owning.. vs renting reach equilibrium..people will always own...

Las, the economics of renting are being screwed with now with all the empty houses and shadow inventory. If they are released, prices would fall and so would rents.

Eaglewwit - remove county housing out of that and the rent prices fall even further. County housing/section 8 is just real-estate-speculator-welfare.

here

Quote:

Will 2012 begin the unclogging of 6,000,000 distressed properties? Over 40 percent of the 2 million active foreclosures stand with no payment in over two years and some with three years and more. Foreclosure starts surge 28 percent in last month of data. Mid-tier markets in Los Angeles and Orange County contract severely in 2011.

http://www.doctorhousingbubble.com/shado....

I've been waiting for mid-tier LA to 'correct' for ten years. Still waiting..

In my neighborhood there's a farmette (< 10 acres) that was for sale for $550k, 2100 sq ft stock finishes house ~15 years old, a 3 stall barn, an equipment shed and a loafing shed in one field. It was on the market for 21 months, 2 offers, the highest being $385k. The sellers have $675k in the place.

How did they respond ? They took the house off the market this January, gutted the kitchen and 2 bathrooms, replaced them with decent but not great tile and custom cabinets and granite counters, and the house will be back on the market in a week or so at a price of ...$595k !

There's a long way to go yet before people understand the reality of the housing marketplace.

When the government gets out of subsidizing loans, we'll be closer to a bottom:

FHA insured loans have stepped in to fill a gaping void left from low down payment mortgage products. The risk and consequence for this action is now coming home to roost in a dramatic fashion.

FHA insured loans have stepped in to fill the giant void left by the collapse in low to nothing down mortgage products. A low down payment is problematic for a variety of reasons and as we will show in data presented below, is a creature of the housing bubble and nothing standard to a healthy housing market. Low down payments through FHA insured loans are financing a tremendous amount of current home purchasing but this is not necessarily a positive given that default rates are surging for FHA insured loans. For example, in California of the active FHA loans over 9 percent are delinquent. This is not exactly a positive figure. Yet this is the number one mortgage product for first time home buyers. A bailout for the FHA is very likely given the ongoing issues with low down payment mortgage options. Contrary to what some will say, FHA insured loans have become a big player in the market because of stagnant household wages and the difficulty for households to scour up any savings.
FHA steps in to fill in hunger for low down payments

The trend towards low down payment products accelerated in the late 1990s on par with the repeal of Glass-Steagall:

Initially the low down (and eventually the nothing down products) were financially dubious inventions from the financial sector. When the mortgage market imploded and the financial sector was melting down, FHA insured loans stepped in to finance the weak balance sheets of households:

The connection is almost perfect. You’ll notice that FHA loans were a small player until 2008 when it nearly tripled in mortgage originations and has grown ever since. It wasn’t like people suddenly fell in love with FHA loans. What happened is that the government and banks realized that Americans with weak balance sheets and very little savings needed a product to make-up for the lack of toxic mortgages. Instead of the FHA being a small player it suddenly became the product of choice as the chart above highlights.

“(Seattle Times) One big reason: Over the past six years, FHA has been the turnaround champ of residential real estate, offering down payments as low as 3.5 percent despite the recession and housing bust, growing its market share from 3 percent to 25 percent-plus. The program is now financing 40 percent or more of all new home purchases in some metropolitan areas and is a crucial resource for first-time buyers and moderate-income families, especially minorities.

With a maximum loan limit of $729,750 in high-cost areas, it is also a force in some of the country’s most expensive markets — California, Washington, D.C., New York and parts of New England.”

FHA insured loans went from financing three percent of mortgage originations to now financing close to 40 percent of new home purchases. Yet this will come at a heavy cost for taxpayers down the road. The defaults are already surging:

The FHA default rate is now approaching 10 percent. Instead of stepping in we have another Fannie Mae and Freddie Mac on our hands. Why is that? Because home prices continue to fall. With shadow inventory set to begin its purge in 2012, lower priced distressed homes will push prices lower. Many that bought in 2009, 2010, and 2011 have seen their equity washed away especially if they bought with a FHA insured loan and went in with the typical low down payment.

Incredibly the FHA was designed to help support affordable housing but does the exact opposite. Home prices in many regions remain inflated because of products like FHA insured loans. The above data is clear that households have fallen behind in the last decade. Yet home prices in many areas remain inflated. Why? Because of a few major reasons:
-Low down payment products allow many who are not qualified to buy when they should be renting (just look at continuing default rates – many originated between 2008 and 2011)
-Low mortgage rates continue to discount the actual risk inherent in the market
-The government-banking bailout that has allowed the shadow inventory to linger now for half-a-decade

What occurs is that prices become inflated because little skin is required to jump into the market. On one side you have banks being bailed out at every twist and turn. On the other side, you have people willing to buy with very little and treat a home purchase like a call-option. If prices rise then it is great but if they fall as they have, they can walk away with little on the table. The vast majority in the prudent middle end up paying for the true moral hazard players on both sides of the system unfortunately. Yet the FHA is starting to crack in more ways than one. Is this a surprise to anyone following the FHA insured market fiasco?

Nothing down or low down payments used to be a comical method of financing homes for the would-be infomercial real estate mogul. These were pitched to the public more to sell the sizzle than the actual steak. Yet in the late 1990s with full financial market de-regulation, investment banks with an army of grafters created a massive amount of toxic loans to filter into the system in the 2000s through option-ARMs, Alt-As, and subprime loans. Yet this mania covered up the reality that American households were actually becoming poorer. The fact that FHA insured loans went from the inner-city to financing prime cities in Orange County is a complete deviation from their mission statement. Then again, if we didn’t learn a lesson from the biggest financial crisis since the Great Depression should we be surprised?
http://www.doctorhousingbubble.com/fha-i....

This blurb was included in an e-mail I received from a real estate company today:

"A 1% increase in interest rates would mean a 10% increase in your monthly payment. Now is the time to Seize the Market! "

No, a 1% increase in interest rates would mean:

$200,000 financed @4%, 30 years fixed = $951.66 payment
Same payment, financed @5%, 30 years fixed = $178,015 worth of house.

In other words your house value goes down by 11%.

I was having this discussion w/a Realt***** a few days ago and we were arguing about housing bottoming. I'm in Northern VA - aka DC Suburbs, where the govt spending continues to fuel everything. I said "what do you think is going to happen when interest rates go up?" the response was almost comical - "when interest rates start going up people are going to be in a rush to buy and prices will go up." seriously, you cant make this **** up.

Hand him a chainsaw and ask him if he's so confident in violating the laws of physics and mathematics that you'd like to see him demonstrate with the chainsaw and his own neck.

In the very short term he would probably be right. After that I would expect it to overshoot to the bottom. But why worry about such thing when The Bernank has things so in control.

I was looking at a house here in FL (online) that was built in 1981. Asking $175k. Well, the homeowner's insurance quote that I got was almost $3,000 per year! Forget that...

This state is too expensive in all possible ways. I just chose that house to check on b/c it is on 1/2 acre with some actual trees and in a good school zone. Property taxes are another $2,200.

For comparison, we had a 1972 ranch in Georgia and paid $600 a year for insurance.