Real estate

» Jas_Jain - FWC: Californians plan exit strategies

January 23, 2006

FWC: Californians plan exit strategies

Thanks, Bruce, for the link. I have been quite aware of this phenomenon.

I remember years when New York State was losing population. I am assuming that in those years New Yorkers were moving to other states, including California. I believe that in late 1970s the housing prices in Silly.con Valley were lower than in metro NYC and NJ. I am sure that NY had a diverse economy back then.

In the long run the economic fundamentals prevail, but don’t tell that to a California econ-boob when it comes to prices of Scams and homes. The biggest boobs that I encounter, frequently, are those who claim that “they are not making land anymore,” or that their little part of California is so wonderful that who would want to move out and “everyone” would want to live there. BTW, in two such “desirable” areas the housing market is comatose.

I have seen so much land being made – homes being built in areas that no one thought would be built ten years ago – in Southern California over the past two years that only blind people can fail to see. Every time the infrastructure – roads, power and water – is pushed into outer areas people start buying sub-divided land and build homes within years (sometimes it takes the next housing boom).

More Prisons = More Land!

I noticed a curious phenomenon in Southern California – wherever prisons were built 30-50 years ago, in far away areas from the population centers, there are lot more homes within miles (in some cases less than ½ mile) of the prisons than is you go another 5-10 miles away from the prisons. Why? Because prisons required roads and power lines. So, part of the infrastructure coast was born by the local governments and the private developers developed areas around the existing infrastructure. If I am given resources I can make enough land for 20 million more people in California. How do you suppose the L.A. metropolitan area became so big? We need few more Mulhollands. California boobs don’t see and can’t think. They simply believe. And they believe what feels good!

There is lot of unused private land in California suitable for housing. All that is needed are rational local governments and men who are experts at making land. Some of these men know how to work the local governments and there will always be more land available to build homes at a profit. More new homes were built in 2004-5 than ever before. The question is: Where did all that land come from?

Jas

-x-x-x-x-x-x-x-x-x-x-x-x-x-x-

http://www.pe.com/localnews/inland/stori...

Californians plan exit strategies

Some take the money and run; some just can't afford to stay

01:26 AM PST on Sunday, January 22, 2006

By DOUGLAS QUAN, LESLIE BERKMAN and MICHAEL FISHER / The Press-Enterprise

Go east. Go north.

This is the rallying cry for a growing number of Californians who are packing up and moving out.

A decade ago, a distressed economy drove people out of the state. Today, it's soaring house prices.

Some simply can't afford a home. Others own homes and are taking advantage of the strong real estate market to cash out and move to nicer homes in Nevada, Arizona, Texas, Washington, Oregon and beyond.

Ray and Sue Manzo have been told their Moreno Valley home could sell for $350,000. If all goes as planned, they'll use the profits from the sale of their home to retire early and escape Southern California's smog and rat race. Their eyes are set on a $190,000 3,200-square-foot home outside of Raleigh, N.C., where they plan to golf, grow their own vegetables and do ceramics.

"We want to be able to drive in the country and see the sights and go 30 miles an hour if we want," said Sue Manzo, 53.

In 2004, the Riverside-San Bernardino metropolitan area drew in about 192,000 people, mostly from the coast, according to Internal Revenue Service data compiled by Moody's Economy.com. But the area also lost about 114,000 residents. Many went to other parts of Southern California, but about one-tenth of those who left went to Las Vegas, Phoenix, Seattle, Houston and Portland.

Californians are changing the real estate landscapes in the communities they're moving to. Many are buying homes for themselves, but many others are investors who are buying houses to resell quickly or renting them out until they appreciate, Realtors in Houston and Phoenix said.

The phenomenon has been so prevalent at new housing developments in Arizona that some builders are requiring buyers to sign a contract pledging to live in the homes for at least a year or face possible penalties of $50,000, said Brian Donnelly, a branch manager at Century 21 Realty in Maricopa County, Ariz. Builders are concerned that neighborhoods filled with renters will chase off potential buyers for other homes in the development, he said.

Keitaro Matsuda, senior economist for Union Bank of California, said as investors and families leave California in search of better real estate bargains, the competition for housing is sharply pushing up prices in states throughout the West, starting with those closest to California.

Between September 2004 and September 2005, the annual housing appreciation rate in Arizona climbed from 14.35 percent to 30.33 percent -- giving Arizona the fastest appreciation rate of any state in the country.

Californians considering relocating to other states need to do their homework, said Kevin Klowden, a research economist at the Milken Institute, an economic think tank in Santa Monica.

"We knew someone who left their house for a tidy sum about five years ago and moved to Dallas and wound up really disliking it," Klowden said. "They hadn't researched the cultural differences, climate, and they decided to move back, but they couldn't afford a place in California anymore."

Housing Crunch

California saw a surge in outbound migration in the early to mid-1990s, but the reasons were different, experts say.

The economy tanked -- sucking jobs along with it -- and the state went into a massive recession.

Now, the issue isn't about lack of jobs; it's about lack of affordable housing.

Californians want nice homes with yards. The demand drives up house prices. When you factor in steep gas prices and ineffective mass transit systems, it can make it difficult for someone who wants to own a home, Klowden said.

The median price of a home in California in December was $458,000, according to DataQuick Information Systems.

Sandra Harris, 44, is moving back into an apartment because she can't keep up with the mortgage payments on her Riverside home, which she has lived in for three years.

She said she plans to put her house on the market soon and is strongly considering moving to Phoenix because she can get a condo for less than $200,000 there.

"The toughest part is I have friends here, but I can't afford to stay," said Harris, who designs and sells boutique items.

William Wilson Lewis III / The Press-Enterprise
Ray and Sue Manzo, with their bulldog, Broderick, plan to sell their Moreno Valley home and retire to North Carolina.



"There's no way I can buy in California again -- no way."

Roxanna Moreno, a single mother, spent two years looking to buy a house in Moreno Valley on her wages of $16.50 an hour as a health services assistant for Riverside County. All she could find at $200,000 and less were old houses needing substantial repairs.

Then she saw pictures of a house that her uncle and aunt from Los Angeles were buying in a new subdivision under development near Dallas, Texas. She immediately changed her plans.

"I called a sales agent and told him to get me a house across the street from them," Moreno said. Via faxes and overnight special deliveries, the 28-year-old woman bought a new single-story, four-bedroom house with almost 1,800 square feet for just $130,000. She moved to Texas in August.

Even with Texas' higher property taxes, she said, her monthly house payments of $1,200 are lower than what she had paid to rent a one-bedroom apartment in Riverside for herself and her 6-year-old son.

Moreno said Texas summers are hot and humid. And she gets homesick for her mother, two sisters and brother in California.

But Forney, the town where Moreno lives, is only 20 miles east of Dallas, a city that she said is cleaner than Los Angeles with less congested traffic. She said she recently started hunting for a new job and quickly was called for interviews.

Moreno said one of the first things she did after moving was to decorate the house the way she had always dreamed when she was an apartment dweller.

"I painted it and made it my own place," she said. "I wanted burgundy for the dining room and mustard yellow for the living room and in both bathrooms I did stenciling."

A survey by the Public Policy Institute of California in 2004 found that a quarter of Californians said the cost of housing was forcing them to seriously consider moving to another part of the state or away from California. The numbers were higher for renters (37 percent) and people younger than 35 (31 percent).

Cashing Out

But where some people see the rising home prices as a roadblock, others see opportunity.

Some Californians are taking advantage of a bonanza of equity in their homes and moving to states where the cost of living is lower. They're using the profits from the sale of their homes to pay cash for better houses, freeing themselves from mortgage payments for the rest of their lives.

"They can purchase a nice home (in Arizona) and still have $150,000 to put in the bank," Century 21's Donnelly said.

The California Association of Realtors' annual survey of its members shows that in the last two years more Californians selling their homes intended to move to other states. In 2005, 31 percent of sellers were planning to go out of state, compared with only 20 percent from 2001 to 2003, the survey found.

Robert Kleinhenz, the association's deputy chief economist, said he believes the increase is triggered by the large wave of aging California baby boomers who want to tap the tremendous equity gains and use the money to help fund their retirement.

In Seattle, another hot spot for relocating Californians, Realtor Sharilyn Patterson said more than 70 percent of her business in the last year involved people moving from California.

"I had about five people who almost paid cash for what they made in California" from selling their home, said Patterson of Windermere Real Estate.

The locals complain "all the time" about Californians driving up the price of housing because they arrive with so much cash from the sale of their California homes, said Rhonda Weldon, a real estate agent who works for Envirian in Scottsdale, Ariz.

David and Diane Hinkle bought their Moreno Valley home in 1998 for $80,000. They recently sold their home for $367,000 and plan to move Yuma, Ariz., within a month.

Mark Zaleski / The Press-Enterprise
Sandra Harris paints the front porch of the Riverside house she is hoping to put on the market, because she can't keep up with the mortgage payments. She is considering a move to Phoenix because she can get a condo for less than $200,000 there.



The Hinkles will leave behind their jobs in Riverside but expect to have no trouble landing work in Yuma, where Diane's married daughter and three grandchildren live.

The couple plans to buy a new, 1,530-square-foot, two-bedroom modular house -- complete with a sunken tub with jets -- for $97,000. They plan to pay cash.

Some of the gains from the sale of their home will go toward new furniture and a couple of cruises.

"My husband and I also want to go to Egypt," Diane Hinkle, 56, said. "We want to see the pyramids."

The Numbers

Thousands of people are coming to the Inland Empire, primarily from Los Angeles, San Diego and Santa Ana, each year.

But the Inland region's growth stands in contrast to the state.

Some data suggest that more people are leaving California for other states instead of coming to California from other states, though foreign migration and births are keeping the state's population up.

Data compiled by Moody's Economy.com using Census Bureau and IRS numbers show that in 2004 half a million people left California for other states while fewer than 400,000 came to California from other states, a net deficit of more than 100,000 that has been growing since 2001.

For the first time in a decade, United Van Lines designated California a "High Outbound" state in its annual migration study.

Other states in that category were Illinois, Indiana, Michigan, Pennsylvania, New York, New Jersey, Rhode Island, North Dakota and Louisiana.

"High Inbound" locations were Nevada, Arizona, Oregon, Idaho, Kentucky, Tennessee, Alabama, Georgia, North Carolina, South Carolina and the District of Columbia.

But the data are far from conclusive. Numbers from California's Department of Finance show that in 2004 there were 55,000 more people coming to California from other states than were leaving, though the gap was shrinking.

Risks

Leaving the state isn't without risks, experts warn.

California has a diverse economy. States with smaller economies can enjoy good times, but they can also quickly falter, said Steven Cochrane, managing director of Moody's Economy.com.

Kevin O'Neil, a real estate agent at Re/Max All Stars Riverside office, said he cautions clients that if they leave California, they may have difficulty returning because California housing prices could continue to escalate. He said he advises them not to sell their houses immediately.

Instead, he suggests they find a renter for their California home and lease a home in another state while they try out a new climate and way of life.

Stacey Sommers and his wife, Brenda, sold their Riverside home in 2003 with the expectation that they were cashing out at the peak of the Inland housing market.

Sommers, who is a real estate professional, acknowledges he was mistaken, since Inland housing prices have continued to climb.

Nonetheless, he said his family was able to pocket a $185,000 gain during the two years they owned the house in Canyon Crest that sold for $389,000.

Sommers said he misses the ethnic diversity of Southern California but not the traffic or the summer heat.

"The quality of life here (in Utah) is much, much superior," he said. "I was just back to California over the holidays, and when I watched the news I did not believe the amount of shootings and rapes and beatings. Here the news is about the high school football team. The biggest problem is about a gay club that wants to organize on a high school campus."

Staff writer Mary Bender contributed to this story.

-- posted by Jas_Jain

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» pbradford6 - Interesting

U.K. housing market's cooling
may be a warning for U.S.

Easing prices slowed
consumer spending;
risks of higher rates
By ILONA BILLINGTON
DOW JONES NEWSWIRES
January 30, 2006

LONDON -- Amber Bird's successes and setbacks in the U.K. housing market have helped heat and now cool the country's economy. Some economists say her experiences -- and those of thousands of Britons like her -- also could be a harbinger for the U.S. economy.

The 28-year-old project manager made a big profit when she sold her first home in July 2003 amid a peak in housing prices fueled by record-low mortgage rates. After buying the two-bedroom London apartment in 2002 for £120,000 ($212,000), she had spent £5,000 remodeling a kitchen, installing a shower and buying a sofa. She then sold the house for £155,000.

Her second home-buying experience wasn't as profitable or as good for the U.K. economy. Ms. Bird and her fiance bought a home in January 2004 in the Cotswolds for £197,000 and spent about £3,000 on new electrical wiring, lighting, a wardrobe, dining table and living-room carpet. But 15 months later -- after five interest-rate increases by the Bank of England -- the couple barely broke even when they sold the house for £200,000, some £25,000 below their asking price.

Now Ms. Bird is renting and no longer shopping in home-improvement and furniture stores.

The double whammy of leveling-off home prices and faltering consumer spending has reverberated through the U.K. economy over the past 18 months, shouldering most of the blame for driving down growth of the country's gross domestic product to 1.75% in 2005 from 3.2% in 2004. Now economists say the U.S. faces a similar risk if the Federal Reserve continues to raise rates, ultimately taking the air out of its housing market and ending a buying binge by American homeowners that has been stoked largely by borrowing made possible by rapidly appreciating home values.

With U.S. consumer spending accounting for about 20% of global GDP growth, many economists believe a punctured American housing bubble could roil global markets -- a fear voiced by economists at the just-ended World Economic Forum annual meeting in Davos, Switzerland.

To be sure, U.K. economic growth is expected to pick up this year and any slowdown in the U.S. is likely to be gradual. Cutbacks in consumer spending also can correct economic imbalances by increasing personal savings rates. And for the global economy, slack created by weaker U.S. domestic spending could be picked up in part by growing economies in Asia and even a modest rebound in Europe, economists say.

Still, the ups and downs of the U.K. housing market show that even soft landings from overheated home sales can spook consumers. "Knowing that the price of your home is no longer growing by 10% or more is enough to put a brake on spending and to see consumers start to save again," says Emma Brandwood, an economist at U.K. financial-services group Legal & General Investment Trust.

When Ms. Bird sold her first home in 2003, the Bank of England had just cut the U.K. base interest rate to a record low of 3.5%. "Within hours," she recalls, "I had a showing and within one day, two offers." U.K. house prices jumped 12.6%, 14.1% and 17% in the next three quarters, from the year-earlier periods. Household spending followed suit, growing a healthy 1% in 2003 and the first half of 2004.

After the Bank of England's five successive rate increases to cool the housing market raised the base rate to 4.75%, household spending began slowing, rising a bare 0.1% in the first three months of 2005.

In the U.S., household spending has been driving the economy during more than a decade of appreciation in home prices of nearly 10% a year on average, accounting for 70% of U.S. GDP growth last year, according to Legal & General's Ms. Brandwood.

Rate cuts by the Fed between May 2000 and June 2003 reduced the federal-funds rate to a low of 1% from 6.5% and triggered lower mortgage rates. That helped extend an already-booming housing market, giving consumers even more equity in their property to spend. But after the Fed reversed course in part to keep inflation in check amid higher energy prices -- raising rates 13 times between June 2004 and December 2005 -- many economists and housing officials expect the U.S. housing market to slow this year.

"The U.S. has been enjoying an unprecedented housing boom over the last decade, but that is set to change in 2006," says Dominick Prevete, regional vice president for New Jersey-based Weichert Realtors.

If Amber Bird's feelings about the U.K. housing market are any indication, it will take a while for consumers to resume spending fueled by fat home-selling profits. "I would rather take my time and look for something that would suit for five years or so," she says, "because I'm a little nervous of the market now."

-- posted by pbradford6

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» Jas_Jain - FW: A ‘Rash Of Cancellations’ In Fresno

Courtesy of:

http://thehousingbubbleblog.com/

A ‘Rash Of Cancellations’ In Fresno

The Fresno Bee has the latest on that bursting housing bubble.

http://www.fresnobee.com/business/real_e...

Adjusting for cool market Valley builders roll out lower-priced houses in anticipation of a slowdown in sales.
By Sanford Nax / The Fresno Bee

(Updated Sunday, February 5, 2006, 7:16 AM)

Some home builders, trying to keep home prices down and responding to a possibly slower and highly competitive market in 2006, are planning to unveil new, more affordable designs.

The houses are likely to be more compact or on smaller lots, and will be priced so that more families can afford them, builders and real estate analysts say.

"If [builders] see things taper off, they could shift the product a couple price points to midmarket or entry-market homes," said John Karevoll of DataQuick Information Services, which tracks real estate trends.

Such is the case in the central San Joaquin Valley, where some developers have been looking for ways to offer more affordable houses.

Wathen-Castanos, for example, has spent the last year fine-tuning a "new product line that is smaller and lower- priced," said Rich Wathen, a company principal.

The design, which would be on a smaller lot, would cost about $275,000. It is expected to debut this summer at Harlan Ranch, a development Wathen-Castanos is co-developing near Clovis.

"We saw an opportunity there even before the market was slowing. When homes go to the $300,000-entry level you realize that incomes are not changing that much, and a good percentage of people who could qualify for a home can't today," Wathen said.

Granville Homes also is set to debut a lower-priced model.

Aimed at families without children and at single professionals, the design will be featured first at the company's La Ventana neighborhood in northwest Fresno, said Darius Assemi, a company principal.

Lower-priced offerings would be welcome in Fresno County, where the percentage of families that could afford a median-priced home sank to record lows in 2005 — the pinnacle of a five-year real estate boom in the central San Joaquin Valley that sent sales and prices to unprecedented levels.

This year should bring continued strong sales, builders say, but not as robust as in 2005.

Last year, sales of newly built houses climbed 6.6% in Fresno County to a record 4,519, and the median price increased 20.6% to $313,500, Karevoll reported.

Madera, Kings and Merced counties also experienced record sales. Tulare County had a small decline.

In Madera County, 981 new houses were sold, up a robust 62% from 606 in 2004. The median price increased 63% to $288,500.

Sales in Kings County reached 619, barely edging out 618 in 2004, while prices rose 28.4% to a median of $262,000.

In Merced County, where a new university is a catalyst, transactions shot up a whopping 70% to 3,458. The median price there grew 39.4% to $357,000. Sales dipped 6.3% in Tulare County to 1,592, but the median price climbed 37.6% to $267,000

"Last year was very, very good," said Wathen, whose company sold more than 400 houses, a record.

Wathen expects more competition this year among builders, and without the escalating prices that frustrated many home buyers the last few years.

"Air is coming out of the bubble," he said. "There will be a lot of competition, and more as the year goes on. That will definitely have an impact on sales and prices."

How much of an impact? No telling for sure, but Wathen thinks sales in the central San Joaquin Valley could fall 10% to 15%. Developers say the long waiting lists and campouts at model home sites that characterized the past few years have mostly evaporated.

Cambridge Homes, which allowed customers to contract for new homes even though they hadn't sold their existing houses, has abandoned that practice in the wake of a possible slowdown.

"We were allowing contingency buyers over the last three years, but in October, November and December we got a rash of cancellations as homes were getting completed," said Steve Lutton, division president of Lennar Homes.

Hanley Wood Market Intelligence found a total of 56 cancellations in Fresno, Madera, Kings and Tulare counties in the most recent three-month reporting period, which ended Nov. 30. That was up from 45 in the same period in 2004 for a cancellation rate of 3.4%. The greatest increase was in Fresno County, where cancellations doubled.

Statewide, permits for single-family home starts are expected to decline, the California Association of Home Builders reports.

Some analysts think the central San Joaquin Valley will fare better than other parts of the state because land is more plentiful and building costs — and the prices paid by home buyers — are less than at the coast.

But, Karevoll acknowledged the dangers of trying to assess this real estate market.

"2006 will be an interesting year for the number crunchers," he said.

"The arrows in the grass are pointing in all different directions. I've never seen the measures of uncertainty so high," he said.

"Potential national trends are tugging everything in one direction, and regional and statewide trends are pulling in the other direction," Karevoll added.

Gauging the impact that slowing sales and appreciation rates would have on the central San Joaquin Valley is hard. An estimated 20% to 25% of new home buyers have come from the San Francisco and Los Angeles regions. What are the ramifications in the Valley if real estate market slumps in those coastal areas, Karevoll asked rhetorically.

It is possible that any slowdown would be short-lived. Lennar had grand opening celebrations at six tracts last weekend, and signed 45 sales contracts. "Traffic was pretty good," Lutton said. "2006 is not as strong as 2005, although it is much better than it was in December."

Mitch Meyer hasn't seen significant slowing at Quail Lake, the community his company is developing east of Clovis.

"From what I've seen, it could be a winter pause," he said.

-- posted by Jas_Jain

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» Jas_Jain - Beautiful Pictures of Housing Cyclicality and Bubbles in Califor

Beautiful Pictures of Housing Cyclicality and Bubbles in Californica

I have rarely seen such clear and “regular” cyclicality in any market as the housing prices in Silly.con Valley over the past 25 years:

http://www.housedata.info/CA/SanJose.Sun...

Unlike other areas in Californica, the cyclicality is correlated with the NASTYQ! Scam Market. The primary driver of housing prices is Silly.con Valley has been the Fraud Capital that comes to the area via the Scam Market (Google is just the latest example). When the Fraud Capital dries up, the housing prices will collapse to at least their lows in mid-1990s (before the beginning of the Scam Market bubble). Most likely, the prices will fall to their pre-1980 level – a drop of 80%. Those who prosper by fraud suffer when fraud must end. Silly.con Valley is full of bubbleheads spoiled by Fraud Capital.

For pictures of Californica bubbles, see the pictures for Bakersfield and Fresno, two areas where there is so much land that the supply of new homes that can be built is nearly unlimited:

http://www.housedata.info/CA/Bakersfield

http://www.housedata.info/CA/Fresno

Thanks, Rick, for the primary link:

http://www.housedata.info/

Jas

-- posted by Jas_Jain

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» Jas_Jain - FWC: “The new mantra is: As goes housing, so goes… the nation’s

--

http://web-xp2a-pws.ntrs.com/content/med...

“Forget about GM. The new mantra is: As goes housing, so goes the nation – or, at least, the nation’s economy.”

I have been saying this lot longer than most. Another mantra that should be popularized is:

What is good for Bankrupters and Fraudsters of New York City (BFNYC) is good for America.

That was the mantra that Alan Greenspan was following and now it has become the mantra of the Federal Reserve. BFNYC have never been more prosperous, relative to everyone else, and more powerful than today. Their CONTROL over Americans’ lives and the world economy is frightening. But what could frighten a complacent American? A prolonged period of economic misery and losing his, or increasingly her, American Dream. The Dream will soon begin to turn into a Nightmare for tens of millions of households. The clock is ticking.

Jas

-- posted by Jas_Jain

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» Jas_Jain - Bush Urges Tax Cuts Extension to "Stabilize Housing"

February 08, 2006

Bush Urges Tax Cuts Extension to "Stabilize Housing"

Now, Bush is pushing another argument for Congress to make his Tax Cuts permanent -- "to stabilize housing." This was reported on one of the two financial TV networks I was watching today (Bloomberg or CNBC).

Looks like Bush and Bernanke are already worried about the housing’s impact on the economy.

Jas

-- posted by Jas_Jain

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» permabear - Home inventories rise sharply in many major markets

Home inventories rise sharply in many major markets

Wednesday, February 08, 2006

By Ruth Simon and James R. Hagerty, The Wall Street Journal

With the key spring selling season about to get under way, the inventory of homes on the market is climbing sharply in a number of major cities.

It is the latest sign that the balance of power between buyers and sellers is shifting as the once red-hot housing market continues to cool. The slowdown is affecting both existing homes and new homes. Tuesday, the nation's largest builder of luxury homes, Toll Brothers Inc., reported a 29 percent decline in new orders in its first quarter, which ended Jan. 31. That was below many analysts' expectations and prompted a sharp selloff in Toll Brothers stock. And Ryland Group Inc., a Calabasas, Calif., builder that sells homes in a wide range of prices, recently announced that new orders declined 4.7 percent for its quarter ended Dec. 31.

Nationwide, there were 2.8 million existing houses and condominiums on the market at year end, according to the National Association of Realtors. That is down slightly from November's 2.9 million listings, but up 26 percent from a year earlier. Adjusted for seasonal variations, inventories have climbed 38 percent since April, according to Goldman Sachs Chief U.S. Economist Jan Hatzius, the largest eight-month increase on record.

The changing climate is particularly noticeable in once-hot markets such as Miami, Phoenix and Washington, D.C., and in areas such as Detroit, where price increases have been modest but the job market is weak. Some brokers report that traffic has increased in recent weeks. But with plenty of properties to choose from, buyers have become more selective.

The rise in inventories has been good news for people like Mike Perillo, an accountant who has been looking for a home in the Philadelphia suburbs for well over a year. "We're now seeing a lot more properties that appeal to us," says Mr. Perillo. "There's more on the market, and there seems to be a lot less people looking now as opposed to this time last year."

In Phoenix, where inventories have climbed steadily since last spring, open houses are attracting a steady stream of lookers, says Charles McLean, broker-owner of Century 21 Metro Alliance. "But people are taking their time," he says. "They're not just jumping and writing a contract." Mr. McLean says that if a listing doesn't attract enough traffic, within 30 days they will consider lowering the price.

In Detroit, sales fell nearly 10 percent in the fourth quarter and inventories climbed amid uncertainty about auto-industry layoffs. To stimulate demand, Real Estate One, a Detroit brokerage firm, has been running a companywide "Bonu$ Homes" promotion in which sellers agree to provide $2,000 to $10,000 toward buyer closing costs on purchases made before April 15.

"The creativity to sell homes is coming back," says Dan Elsea, president of brokerage services at Real Estate One. "We haven't needed it for years."

Economists and real-estate experts are watching the inventory numbers closely for signs of whether the housing market is poised for a soft landing -- or something worse. When inventories are tight, buyers competing for scarce properties bid up prices. As the supply of homes on the market increases, price increases slow and buyers gain negotiating power.

The recent rise in inventories follows a prolonged housing boom during which strong demand and low mortgage rates triggered bidding wars and fueled double-digit price gains in many markets. But those days appear to be over. The National Association of Realtors said that it expects sales of existing homes to fall by 4.7 percent this year to 6.74 million and median home prices to rise an average of 5 percent, down from 12.7 percent last year.

Some analysts are more pessimistic. In a joint forecast issued last month, housing analytics firm Fiserv CSW, a unit of Fiserv Inc., and economic forecaster Moody's Economy.com, a unit of Moody's Corp., called for home prices to increase by an average of 1.5 percent this year.

With the number of listings rising and the pace of sales slowing, there is now a 5.1-month supply of existing homes on the market, based on the current rate of sales, according to the National Association of Realtors, compared with a record low of 3.8 months in January 2005. Historically, a 5.5-to-six-month supply has been considered a balanced market, says NAR Chief Economist David Lereah. But with the Internet making shopping for a home easier, he says, it is no longer clear just what a balanced market is.

Another uncertainty: how much of the increase in inventories is due to speculators looking to sell, and whether they will be more willing to cut prices as the market cools. Investors accounted for 9.5 percent of mortgages to buy homes through October, but their share of purchases peaked during the first half of the year, according to LoanPerformance, a unit of First American Corp. Brokers in markets such as Phoenix and South Florida say they've seen an increase in investor-owned properties for sale.

The sharp rise in inventories isn't universal. In Seattle, inventories have declined modestly over the past 12 months as a robust job market sustains demand. The supply is so tight, "I don't know if it can get any lower," says Michael Skahen, owner of Lake & Co., a Seattle brokerage firm.

In Dallas, inventory has edged up slightly, but the pace of sales is up. "The buzz around my office is that everybody is busy now," says Steve Hendry of Re/Max Associates of Dallas. "Our economy seems to be picking up considerably. It's just night and day compared to what was going on this time last year."

Still, the pinch is being felt in many corners of the housing market. The number of completed new homes currently on the market has risen nearly 40 percent over the past year, according to Hanley Wood Market Intelligence in Costa Mesa, Calif., a market research and consulting firm. The shift has been particularly noticeable where inventories had been thin: In central California, the inventory of new homes climbed to 238 in the fourth quarter, from just 26 a year earlier, an increase of more than 800 percent.

As orders slow, builders are engaged in heavy discounting and promotional activity, particularly among homes for the second-time, move-up and luxury buyer. A survey conducted last month by the National Association of Home Builders found that 64 percent of builders are now using incentives such as offers to pay closing costs and free upgrades; 19 percent are cutting prices.

Last week Standard Pacific Corp., a major builder, said that new orders, excluding acquisitions, fell about 20 percent in the fourth quarter compared with the same period a year earlier. Lennar Corp., another builder, recently offered discounts of $20,000 to $30,000, plus help with closing costs and bonuses to brokers, on selected homes in the Tampa area.

Robert Toll, Toll Brothers' chairman and chief executive, indicated that slowing orders appeared to reflect three trends. First of all, speculators, who buy homes as investments hoping to flip them later at a hefty profit, are getting out of the market and cancelling contracts. Toll said it also is constrained by long delivery times in many communities. During the first quarter, delivery times have increased to 11 months or more -- before the maximum was 11 months. Buyers are reluctant to commit to such a long delivery time when the future of the market is uncertain. Toll also has a big exposure to Washington, D.C., New Jersey, Phoenix and California -- markets that appear to slowing more rapidly than some others.

The supply of unoccupied condominiums is also climbing in many areas. In New York's Westchester County, the number of condos on the market jumped to 617 at the end of 2005 from 397 a year earlier. In the Boston area, the number of condos listed at the end of January was 5,114, up from 2,876 a year earlier. In the Washington, D.C., metro area, new-home inventory climbed by more than 900 percent to 2, 413 in the fourth quarter over the same period a year earlier, largely because of the completion of several condo projects, according to Hanley Wood.

-- posted by permabear

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» axolotl - ZILLOW.COM - A useful tool.

Put the zip code 94083 in the http://www.zillow.com and check out Kirk's environs. Forbes website this morning featured penthouses and one in San Francisco for a mere $6 mill seems to have one fantastic view.

-- posted by axolotl

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» permabear - Re: ZILLOW.COM - A useful tool.

In response to ZILLOW.COM - A useful tool. posted by axolotl:

Really cool web site. For those who haven't try it, highly recommended. What's best is plugging in individual addresses. You can find out the value of all of your friends' houses.

-- posted by permabear

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» lcha - Re: Re: ZILLOW.COM - A useful tool.

In response to Re: ZILLOW.COM - A useful tool. posted by permabear:

I sent Zillow an e-mail yestreday expressing my disappointment iin their database.

My house information was completely wrong. The square footage was off by 70% and the # of bedrooms and bathrooms was wrong.

Even worse, Zillow lets you correct these things. After I did this the value of my house came in a good 25% too high for my area.

So, if I can't trust info and values that I know for sure, how can I trust other info in their database. And no matter how slick their website is if I can't trust their database the site is useless.

-- posted by lcha

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