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- Metro Detroit home prices are rising, but are the gains real? | Detroit Free Press | freep.com
"… are the gains real?" That's an excellent question. J.C. Reindl reports:
The steady march of upward home prices prompted one metro-Detroit expert to say the area might actually be in a mini-bubble.
Steve Bartley, owner of Advertising That Works, a Bloomfield Township-based company that tracks home sales through issuance of warranty deeds, said today that he's somewhat suspicious of the upward momentum.
"I think prices have shot up too much in the last year, year and a half. I do think that we're in a mini-bubble right now. But not a big bubble like the old days."
Lisa Hall of Re/Max Dream Properties in Northville and Livonia said real estate prices have indeed been on the march in suburban Detroit, boosted in large part by the tight availability of homes on the market, particularly homes between $200,000 and $400,000.
But Hall pointed out that not all local markets are back to where they where five years ago.
"We need to be cautious in telling people how great the market is because in certain pockets, it's not so great," she said.
- Rise in Home Prices May Be Peaking – NYTimes.com
Consumers grew particularly pessimistic in their outlook on the economy six months from now, while their assessment of current economic conditions declined much less severely. They also expect less hiring in the months ahead. Consumers' confidence is closely watched because their spending accounts for 70 percent of economic activity, and a decline in confidence is likely to reduce economic growth.
- BoE Vigilant About Risks On Housing Market, Carney Says
Carney [Bank of England Governor Mark Carney] said the bank would be "vigilant" about signs of "acceleration and greater exuberance in lending practices."
He noted that the bank is better placed with a wide range of tools that it can deploy in case of overheating in the property market before adjusting key interest rates.
"We're now the supervisor of the banks and building societies so we could tighten that supervision," he said.
- Home Prices Keep Rising. Will the Market Squeeze Out Middle-Class Buyers? – Businessweek
Karen Weise reports:
… a less-buoyant release yesterday from the National Association of Realtors showing that pending existing home sales fell in September for the fourth straight month, which analysts attributed to rising interest rates. While that doesn't sound optimistic, it's still up 1.1 percent over a year earlier because housing is so cyclical. Any slowdown this fall is largely seasonal, Thomas Popik, research director for Campbell/Inside Mortgage Finance HousingPulse Tracking Survey said in a report before the NAR data was released.
The cyclicality point is well-made.
However, aside from rising interest rates, job stagnation is a prime issue/obstacle.
Then there's what Jed Kolko tweeted:
Even with modest slowdown, why are home prices still climbing? One reason: buying still 35% cheaper than renting. http://t.co/B4IIrMLFVD
— Jed Kolko (@JedKolko) October 29, 2013
Jed's Trulia's Chief Economist.
Of course, Jed knows that renters typically don't have the down-payment and other money saved up to buy. Plus many people want the flexibility of a rental agreement allowing them to not renew their lease so they may more easily move for a different job or what have you.
- [Highly recommended] Calculated Risk: Comment on House Prices: Real Prices, Price-to-Rent Ratio, Cities
What a great, short, to-the-point article this one is!
Bill McBride gets right to the point showing us nominal versus inflation-adjusted housing prices.
When adjusted for inflation, we are much further away from bubble territory than would otherwise seem.
Thank you, Mr. McBride.
Check out his article. It contains great graphs, as usual.
I also think it is important to look at prices in real terms (inflation adjusted). Case-Shiller, CoreLogic and others report nominal house prices. As an example, if a house price was $200,000 in January 2000, the price would be close to $276,000 today adjusted for inflation. That is why the second graph below is important – this shows "real" prices (adjusted for inflation).
- Southbank properties left high and dry
Australia: This is a very interesting way to attempt to gauge vacancies. Jason Dowling reports:
A study has found more than 64,000 residential properties in Melbourne are rarely used and almost 12,700 appear unoccupied, with Southbank the top area for vacancies.
The findings are based on an analysis of water use commissioned by Prosper Australia, a group seeking tax changes to improve the efficiency of land use.
The report said property speculation, with investors buying homes purely for capital gain, could be driving the high number of empty properties.
"The annual increase in the capital value of the land under a property can outrun the net rental income," it said. "An investor may calculate it is profitable to purchase a property exclusively for the potential capital gains.
Real Estate Institute of Victoria chief executive Enzo Raimondo said there were many reasons properties were vacant.
"In many suburbs people buy an old property and probably land bank until they get development approval for the townhouses or apartments," he said.
"There might be some people who just don't want to lease out their properties; there might be other people who are holding them due to a long settlement."
He said water use may not give the full picture of properties available to the rental market.
Gil King, of the Housing Industry Association, said the low water use at Southbank might be an indication of serviced apartments or infrequently used city homes for people living outside of Melbourne.
- Tepco shouldn't be in charge of Fukushima shutdown: Japan panel | Reuters
This is a huge real-estate issue. Fukushima is impacting large areas in Japan but also the ocean, which carries contaminated water to the West Coast of the US and then over time, around the world. The atmosphere also carries radioactivity from the ill-conceived nuclear-power plant. If they make a big enough mistake while further decommissioning the plant, it could magnify the current problem thousands of times over and negatively impact global real estate in nearly unimaginable ways.
(Reuters) – Tokyo Electric Power Co should be stripped of the responsibility for shutting down its crippled Fukushima nuclear power plant, according to a draft proposal by a panel of Japan's ruling party.
Tokyo Electric, or Tepco, has been widely criticized for repeated missteps, poor planning and a lack of disclosure in its efforts to clear up the site of the worst nuclear disaster since Chernobyl in 1986.
A task force formed by Prime Minister Shinzo Abe's Liberal Democratic Party (LDP) suggests that responsibility for the massive work of decommissioning the Fukushima plant be stripped from the giant utility in its current form – either by creating a separate unit within Tepco, breaking the unit off as a separate company or hiving it off as a government-affiliated, but independent, administrative agency.
A person familiar with the LDP panel's deliberations said it favors the option of creating a separate organization within Tepco to handle decommissioning – a job that could take decades as massive amounts of toxic water and spent fuel are removed and stored elsewhere.
The policy recommendations will be presented to Abe as soon as next week.
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