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Economics
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Written by Jonathan Smoke
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09.20.2007 |
The reaction to yesterday’s Commerce Department report on starts and permits sounds as if the news is bleak. Of course watching a key stat continue to fall seems depressing, but it’s the medicine that the housing market needs to take to get things back into a better state for stability in prices and future sales. The key will be taking this medicine as directed for the full prescription. | | No comments for this item |
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Economics
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Written by Jonathan Smoke
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09.17.2007 |
In my last post I revealed the top 20 markets for potential future housing returns based on an index we developed to compare a market’s prospects for strong local economic conditions, undersupply of new construction, minimal downside price risk, and strong price appreciation potential.
The bottom 20 markets on the index are almost as interesting as the top 20. They are presented here in order of worst to best, relatively speaking. | | No comments for this item |
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Economics
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Written by Jonathan Smoke
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09.14.2007 |
Yesterday’s post highlighted the most oversupplied and under supplied housing markets in the country. Markets with large total permits overhang from the last three years would most likely remain buyers’ markets.
On the flip side, those with the least overhang didn’t necessarily translate into clear cut ideal markets for investment as economic conditions and home price prospects may still create some challenges to overcome. | | No comments for this item |
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Economics
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Written by Jonathan Smoke
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09.13.2007 |
 As we looked at Jacksonville’s inventory overhang yesterday, we developed a very useful measure for identifying which markets are most out of balance.
While balance might seem the best condition to achieve, for investment purposes identifying the extremes--those markets most oversupplied and most undersupplied --should signal where there may be buying opportunities and where there may be the best conditions for price appreciation. | | No comments for this item |
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Economics
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Written by Jonathan Smoke
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09.12.2007 |
 Yesterday I covered the topic of new home inventory overhang and specifically looked at Jacksonville, FL. We saw that in looking only at single-family homes, Jacksonville had a clear bubble in permits from 2003 to 2005, but appeared to have pulled back significantly so that much of the inventory presumably would be worked off.
I ended the post saying we would next dig into multifamily permits or what the total permit picture had to say. | | No comments for this item |
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Economics
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Written by Jonathan Smoke
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09.11.2007 |
 A clear issue impacting new home sales and new home prices is the amount of new home inventories that resulted from frenzied permits and starts at the peak. The cure for such an overhang comes from time, a reduction in new permits and starts, and eventually an increase in sales.
An increase in sales pace doesn’t look likely in the foreseeable future as the pace of new home sales is also impacted by the pace of existing home sales and the amount of inventory available in existing homes. Because of investor sales and foreclosures, existing home inventories will not decline for some time. | | No comments for this item |
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Mortgage
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Written by Jonathan Smoke
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09.07.2007 |
What are the three most important words in real estate? Location, location, location. I try regularly to illustrate the economics behind that bit of wisdom that was passed on to me early in my career.
That’s why I was surprised to see a post from Maya Roney at Business Week on the Hot Property blog entitled “Real Estate Is Not All Local.” Roney’s thesis appears to be that the mortgage problems are national so the impact to home sales is in part national. | | No comments for this item |
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