{"id":1325,"date":"2013-05-15T18:23:16","date_gmt":"2013-05-15T22:23:16","guid":{"rendered":"http:\/\/dankrell.com\/blog\/?p=1325"},"modified":"2019-06-30T11:41:17","modified_gmt":"2019-06-30T15:41:17","slug":"a-balanced-real-estate-market-emerges-despite-fears-of-a-housing-bubble","status":"publish","type":"post","link":"https:\/\/dankrell.com\/blog\/2013\/05\/15\/a-balanced-real-estate-market-emerges-despite-fears-of-a-housing-bubble\/","title":{"rendered":"A balanced real estate market emerges despite fears of a housing bubble"},"content":{"rendered":"\n

\"real<\/a>As talk of a housing recovery is gaining traction, some experts are saying the recovery may be artificial and short lived. Warnings from economists and a former mortgage executive paint a picture of a possible housing bubble<\/a> being caused by the source they claim is cause for increasing home prices.<\/figure><\/h3>\n\n\n\n

Steve Cook, of Real Estate Economy Watch, revealed a recent survey of 105 economists, real estate experts and investment and market strategists. Although respondents predicted positive home price appreciation through 2014; the experts expect that home prices won\u2019t fare as well during ensuing years through 2017. Furthermore, 48% of the respondents felt that current Federal Reserve monetary policy might be the reason for recent home price spikes; which may be creating a future housing bubble.<\/p>\n\n\n\n

A majority of the expert panel suggested that requiring a minimum down payment in the Qualified Residential Mortgage<\/a> (a provision to allow lenders to bypass credit risk retention rules) would create a long-term sustainable housing market. However, only about a third of respondents believe that a minimum down payment should be 20% or more.<\/p>\n\n\n\n

An April 9th online article for The Wall Street Journal titled \u201cIs the Fed Blowing a New Housing Bubble?<\/a>\u201d written by former Fannie Mae executive, Edward Pinto, explores the source for of the housing recovery. Pinto pointed out that although recent home price surges are the highest since 2006, data released by the Federal Housing Finance Agency (FHFA) indicate that home price increases may not be due to \u201cbroad based improvements in the economy\u2019s fundamentals.\u201d But rather, home price increases are being driven by low interest rates due to the Fed\u2019s Quantitative Easing program.<\/p>\n\n\n\n

Pinto compares current market conditions to those of 2006, when government policies also likely contributed to a housing bubble. During that period, like today, income is not keeping pace with home price increases. As an example, he cited FHFA’s conventional home-financing data that indicated new home purchase prices increased 9% during February 2013 and 15% during February 2013; while income barely increased 2% (keeping relative pace with inflation).<\/p>\n\n\n\n

Pinto and his assessment of recent home price spikes are getting some attention. John Aidan Byrne of the NY Post wrote on May 6th (\u201cNext Home Crisis<\/a>\u201d) about Pinto and his concerns. Because suppressed interest rates are pushing home sale prices up, Pinto surmises that when the Fed\u2019s QE program ends, interest rates will rise creating an \u201cinevitable housing disaster.\u201d However, he concludes that to avoid a housing disaster: income must increase 33%, home sale prices will drop about 25%, or lending standards must loosen significantly. He points out that loose lending policies did not end well in the last housing bubble (http:\/\/www.nypost.com\/).<\/p>\n\n\n\n

Regardless of murmurs of another housing bubble, current market conditions might indicate a balanced market. The trend of monthly local absorption rates compiled from the local multiple list service has consistently shown to be in recent months between a buyer\u2019s market and a seller\u2019s market (absorption during a buyer\u2019s market tends to be below 50%, while a seller\u2019s market tends to be above 60%).<\/h3>\n\n\n\n

Even though there is little inventory, supply and demand may be in overall balance. However, that being said; supply and demand seems to be out of balance for well priced updated homes, which appear to the source of bidding wars and escalation clauses. Homes priced above the market and\/or needing repairs\/updates take longer to sell.<\/p>\n\n\n\n

\"Protected<\/a><\/figure>\n\n\n\n

By Dan Krell
Copyright \u00a9 2013 <\/p>\n\n\n\n

This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws. <\/p>\n","protected":false},"excerpt":{"rendered":"

As talk of a housing recovery is gaining traction, some experts are saying the recovery may be artificial and short lived. Warnings from economists and a former mortgage executive paint a picture of a possible housing bubble being caused by the source they claim is cause for increasing home prices. Steve Cook, of Real Estate … <\/p>\n

Continue reading “A balanced real estate market emerges despite fears of a housing bubble”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[674,339,288,651,13],"tags":[994,906,466,445,987,643],"class_list":["post-1325","post","type-post","status-publish","format-standard","hentry","category-balanced-housing-market","category-housing-bubble","category-housing-market","category-housing-recovery","category-real-estate","tag-balanced-housing-market","tag-housing-bubble","tag-housing-market-2","tag-housing-market-trends","tag-housing-recovery","tag-real-estate-bubble"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p1VZLf-ln","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/1325","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/comments?post=1325"}],"version-history":[{"count":5,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/1325\/revisions"}],"predecessor-version":[{"id":5059,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/1325\/revisions\/5059"}],"wp:attachment":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/media?parent=1325"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/categories?post=1325"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/tags?post=1325"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}