Archive for the 'Real Estate Market Data' Category

U.S. Housing Starts Slip in February from Upwardly Revised January — Still in Slow Recovery

posted on March 16th, 2010 filed under: Real Estate Market Data

Housing starts remain in a slowly rising pattern of recovery.  The Census Bureau estimated 575,000 starts at a seasonally adjusted annual rate, down 5.9% from the 611,000 now in the books for January, and roughly flat compared to February 2009.

January’s number was revised up from an initially reported 591,000.

The margin of error on these data is about +/-10%, but the trend is consistent with a slow, grinding recovery.

U.S. Housing Starts -- 1990 to Feb. 2010

The real-estate market in Miami and Coral Gables has generally followed the pattern of the national data over the past decade, only to greater extremes.

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With Fed Ending Mortgage Purchases, Fannie and Freddie Step In — What It Means for Real Estate in Miami and Coral Gables

posted on March 13th, 2010 filed under: Real Estate Market Data, Real Estate News

It might take a little longer for the free market to start peeking through the fog of government intervention.  As noted previously, the Federal Reserve has artificially suppressed mortgage rates by purchasing well over a trillion dollars of mortgage-backed securities (MBS).

Ordinarily, rates would rise if the biggest buyer walked away from the market.  Rising mortgage rates would put renewed pressure on property values here in Miami and Coral Gables, as elsewhere.  But the nearly total nationalization of the mortgage market will not be so quickly abandoned.  Fannie Mae and Freddie Mac recently announced plans to buy back $200 billion of nonperforming mortgage loans at full value.

That’s not the same as buying new mortgages, but will have much the same effect.  The investors who get bought out are in the mortgage market for a reason.  It’s their investing focus.  And they’ll plow a lot of that freed-up money right back into mortgages — maybe not every dime of the $200 billion, but most of it.

Is this another bailout?  Yes, indirectly.  Fannie and Freddie guaranteed that garbage in the first place, so they’re already on the hook for it.  But Fannie and Freddie themselves exist only by dint of taxpayer bailouts.  If you’ve got a claim against an insurance company that gets bailed out, then you’re bailed out too.  Think AIG.

Considering the timeline, an intent to perpetuate the socialization of housing is easily deduced:

09/23/09:  Fed announces it will buy $1.25 billion in MBS through March 2010

12/24/10:  Treasury lifts all limits on taxpayer bailout of Fannie & Freddie

02/10/10:  Fannie & Freddie announce plan to buy back $200 billion in bad loans

Isn’t that special?

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Condos in Downtown Miami Reportedly Gaining Residents (If Not Value)

posted on March 12th, 2010 filed under: Financial Responsibility, Real Estate Market Data, Real Estate News

Condo prices may not be recovering yet in downtown Miami, but enough units have been sold and rented that the area is gaining residents and becoming more lively.  That’s the conclusion of a study reported by the Miami Herald today.  (No mention of Coral Gables, but the trend there is probably comparable.)  A few highlights:

  • 74% of units are occupied, up from 62% last May, which means . . .
  • 26% of units are vacant, down from 38% last May
  • 52% of occupied units are rented
  • 68% of units have been sold, up from 62% last May
  • 22,079 units were built since 2003
  • 7,010 remain unsold, down from 8,000 last May
  • 51% of unsold units are in the Brickell area, 23% in the Central Business District

Miami Real Estate Photos -- Condos and Biscayne Bay

A choice quote comes from a nightclub operator who says things are going well.  And why, praytell, are things going well?

“Renters are the ones with the disposable income.”

Owning a home shouldn’t mean otherwise ruining your life, but that’s exactly what happens when the financial/real-estate complex convinces you to commit an unreasonable portion of future earnings to housing.

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Miami Foreclosure Filings May Have Peaked (But Liquidation Phase Remains)

posted on March 11th, 2010 filed under: Real Estate Market Data

The good news for Miami and Coral Gables real estate optimists is that the pace of foreclosure filings is probably in the process of receding.

Miami Foreclosure Filings Chart -- Annual

Miami Foreclosure Filings Chart -- Monthly

Filings, however, are just the first step in resolving nonperforming loans.  The mortgage holder still needs to either modify the delinquent borrower’s loan to the point that the borrower can handle the payments, or repossess and sell the property.

It ain’t over ’til it’s over.

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Pending Home Sales Fall More

posted on March 7th, 2010 filed under: Real Estate Market Data

The National Association of Realtors reported this week that pending home sales fell again in January.  The NAR’s index, which tracks contract signings for houses, condos and co-ops, fell 7.6% on a seasonally adjusted basis, from December’s revised level of 97.8 to January’s preliminary reading of 90.4.  An index level of 100 represents the number of pending sales in January 2001.

The index started 2009 at 80.5 and climbed to 112.4 in October as the government’s $8,000 tax credit artificially boosted sales last summer and fall.

The NAR’s chief economist blamed the January decline on weather, but the biggest drop occurred in the West.  The South fared least worst, with a month-to-month decline of 2.1%, from 100.2 to 98.1, after ranging in 2009 from 83.1 in January to 114.9 in October.  Data are not broken down by locality, but the real-estate market in Miami and Coral Gables has hardly been immune from national trends.

Bloomberg quoted a Wells Fargo Securities economist as saying:  “When you take away all the support from the housing market, the underlying demand for housing is a lot weaker than we thought.  We clearly pushed some demand forward, and there wasn’t that much demand to pull forward anyway.  The housing recovery is going to be very, very slow.”

That certainly seems plausible for real estate in Miami and Coral Gables, where the case for buying a home remains weak.  (Prices remain high relative to incomes, historical valuations, and rental costs.)

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Real Estate Fundamentals — Wages in Miami

posted on March 3rd, 2010 filed under: Financial Responsibility, Real Estate Market Data

Previous posts have emphasized the relationship between home prices and incomes.  While some fortunate folks don’t need to work for a living, most do.  Property values are in significant part a function of what people earn (and of their willingness and ability to borrow against the next 30 years of those earnings to buy this particular asset).  So when considering the condition of the real estate market in Miami and Coral Gables, it helps to understand the area’s wage profile.

Here’s the picture painted by the Bureau of Labor Statistics in a September 2009 analysis of data from 2008.  (The time lag is of little consequence, as these numbers don’t move far in a single year or two.)

Miami Wage Data -- BLS Survey

The data are for the Miami metropolitan statistical area, not just Miami or Coral Gables.  But many of the other data, like median home prices, are for the same area.

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Case-Shiller Index Shows Price Dip in Miami Real Estate

posted on January 1st, 2010 filed under: Real Estate Market Data

Single-family home prices declined in Miami from September to October, according to the Case-Shiller index maintained by Standard and Poors.  The decline amounted to only 0.4% (from an index level of 149.69 to 149.09), but raises doubts about the stabilization in Miami and Coral Gables real estate over the past few months.

October and November were when everybody was supposed to be rushing to close on deals to qualify for the $8,000 tax credit.  It’s not a sign of great strength if Miami real estate prices were softening despite that flurry of government-manufactured activity.

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