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The Housing Bubble In 2006 Part I Is It Boom Or Bust
ow interest rates and housing, at least according to a
relatively easy access to commonly used ratio comparing
mortgage money are just two mean house prices to mean family
factors that have caused a boom income on a local basis.
in residential real estate prices
over the past few years. This Using U.S. Census Bureau's
phenomena has caused a number of numbers from 2003 and looking at
analysts to ask whether a various cities across the
national "housing bubble" now country, we can immediately see
exists and how its potential how varied pricing is throughout
collapse could effect the the United States when the ratio
economy. This is a complicated is applied. On the low end are
subject that is influenced by cities like Pittsburgh,
both national and regional Pennsylvania with a ratio of 1.47
issues. and Corpus Christi, Texas with a
ratio of 1.58. On the other end
Over the next several columns, of the scale are Santa Ana,
we'll look at many of these California and San Francisco
issues and see if we can weave coming in at 8.95 and 8.81
our way though the maze of respectively. The average ratio
possibilities that could impact for the entire country is 3.59.
the outcome of this concern.
Here are some excerpts from
Let's begin with a regional recent studies on these cities:
overview and remember the words
of Tip O'Neill, the venerable Pittsburgh - On December 18,
Congressman from Massachusetts 2005, the "Pittsburgh
who was fond of saying, "All Tribune-Review" sited a study
politics are local." The same that showed "housing prices in
principle could be said of the Pittsburgh region appear to
be right where they should be, be a red hot market now has a
and importantly, they are not "greater than 50% chance of
overvalued as are houses in some experiencing price declines,"
other areas of the country." according to the PMI U.S. Market
According to the National Risk Index. The reported median
Association of Realtors, the house price is $710,000 with an
Median Home Price in the first appreciation factor over the past
quarter of 2005 was $106,400. year of 10.4%.
This was a 6.6% increase from the
first quarter of 2004 when the San Francisco - The National City
median price was $99,800. Corp study found that San
Francisco was 30% overvalued.
Corpus Christi - Third quarter National real estate firm
2005 results from a Housing Caldwell Banker recently
Market Analysis prepared by estimated that a 2,200 square
National City Corp found that foot house with 4 bedrooms, 2"½
Corpus Christi was still -8% bathrooms, a family room and a
undervalued when compared with two car garage in a
other cities across the United "middle-management" neighborhood
States. The study done by the would sell for approximately
National Association of Realtors $1,300,000. There are some signs
found "the local housing market of the market cooling. In a
is in excellent shape with a 11/1/05 USA article, Judi
potential for significant equity Keenholtz, CEO of Empire Realty
gains." The median house price in reported that "desirable homes in
the market is $123,000 and has good school districts that used
appreciated approximately 30% to fetch eight to ten bids now
over the past three years. get three to four."
Santa Ana - What has continued to Given the above examples, we can
begin to see pricing differences
of housing throughout the country In our next column we'll look at
and therefore how difficult it is the ratio of "home price to rent"
to predict a national trend. to get a different perspective
and try to answer whether fans of
Of course a single ratio like the 49ers could retire with
"family income: house price" is newfound wealth and happiness in
only one indicator and can't the land of the Steelers.
provide conclusive proof of a
trend one way or another. Other Stay Tuned.
pieces must be brought into play
if we can gain a true overview.
About the Author:
Glenn ("Chip") Dahlke, a senior contributor to the Living Trust Network, has 28 years in the investment business. He is a Registered Representative of Linsco/Private Ledger and a principal with Dahlke Financial Group. He is licensed to transact securities with persons who are residents of the following states: CA. CT, FL, GA, IL. MA, MD. ME, MI. NC, NH, NJ, NY.OR, PA, RI, VA, VT, WY.
If you have any questions or comments, Chip would love to hear from you. You may contact him at dahlkefinancial@sbcglobal.net. You may also contact him at the Living Trust Network. It's web site is http://www.livingtrustnetwork.com.
Copyright 2006. Living Trust Network, LLC. All Rights Reserved.
Source: www.isnare.com
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