Friday, June 30, 2006
How Will Cape Coral Real Estate react to a 1/4 Point Hike?
Perhaps it's too soon to see the effect a quarter point rate hike will have upon consumer spending and real estate purchases in Southwest Florida and Cape Coral.
Yet it doesn't take a rocket scientist to figure out that as interest rates rise, it turns some buyers into renters.
Fortunately, the hike likely won't affect real estate buyers in the $250,000+ category.
Yet, it's worthwhile to note that those who had intended to buy 6 months ago and are hanging on the fence to enter the market, are now starting to pay the price for that indecisiveness. Banks and mortgage companies alike will pass on the increasing cost to their buyers.
Like this article?
Feel free to forward it to friends, link
back to our blog, and even a share a comment!
Yet it doesn't take a rocket scientist to figure out that as interest rates rise, it turns some buyers into renters.
Fortunately, the hike likely won't affect real estate buyers in the $250,000+ category.
Yet, it's worthwhile to note that those who had intended to buy 6 months ago and are hanging on the fence to enter the market, are now starting to pay the price for that indecisiveness. Banks and mortgage companies alike will pass on the increasing cost to their buyers.
Like this article?
Feel free to forward it to friends, link
back to our blog, and even a share a comment!
Thursday, June 29, 2006
How the Feds New Rate may Affect Cape Coral Real Estate
Later today the Federal Reserve will unveil its new rate.
How will this affect housing in SouthWest Florida and Cape
Coral real estate values?
It could go either way.
For instance, on Tuesday this week, the Florida Association of Realtors reported that
"Resales of homes in most Florida markets continued to slow in May, though
prices posted Double-Digit annual gains once more in many metro areas and
statewide." the Florida Association of Realtors reported Tuesday.
Nationally, home resales dipped for the third time in five months, with most of
the weakness in the Northeast, the National Association of Realtors said in a
separate report.
Although no one has a crystal ball, a small rate hike by the Feds would obviously
force out many low-end homebuyers looking to purchase anything in the $245,000
range and below.
But the opposite may be true for those mid to higher end buyers that have been
on the fence, waiting to see what the Fed will do.
If the rates rise, these buyers may swarm and purchase to lock in today's rate
before they continue to climb. We've already seen a 2 point rise in the past
12 months...who knows if that will stop or climb?
What's more, the fact is that we still have the lowest interest rates we've seen
since the 1960's. Remember what they were in the '80's?
Relative to the past 40 yrs, the rate is still advantageous. In just a few hours,
we'll see what the Feds do. Bottom line, regardless of what they choose, the law
of supply and demand is on our side in this market.
Best off all Florida real estate, Cape Coral, and SouthWest Florida continues to benefit
from consistent in-migration, and real estate values continue their annual
double digit growth.
How will this affect housing in SouthWest Florida and Cape
Coral real estate values?
It could go either way.
For instance, on Tuesday this week, the Florida Association of Realtors reported that
"Resales of homes in most Florida markets continued to slow in May, though
prices posted Double-Digit annual gains once more in many metro areas and
statewide." the Florida Association of Realtors reported Tuesday.
Nationally, home resales dipped for the third time in five months, with most of
the weakness in the Northeast, the National Association of Realtors said in a
separate report.
Although no one has a crystal ball, a small rate hike by the Feds would obviously
force out many low-end homebuyers looking to purchase anything in the $245,000
range and below.
But the opposite may be true for those mid to higher end buyers that have been
on the fence, waiting to see what the Fed will do.
If the rates rise, these buyers may swarm and purchase to lock in today's rate
before they continue to climb. We've already seen a 2 point rise in the past
12 months...who knows if that will stop or climb?
What's more, the fact is that we still have the lowest interest rates we've seen
since the 1960's. Remember what they were in the '80's?
Relative to the past 40 yrs, the rate is still advantageous. In just a few hours,
we'll see what the Feds do. Bottom line, regardless of what they choose, the law
of supply and demand is on our side in this market.
Best off all Florida real estate, Cape Coral, and SouthWest Florida continues to benefit
from consistent in-migration, and real estate values continue their annual
double digit growth.
Tuesday, June 27, 2006
Cape Coral Florida Headlines
3 Facts:
1) Cape Coral Florida real estate encompassed across 115 sq miles with 400 miles of canals
2) Cape Coral Florida has the second lowest crime rate in Florida
3) Cape Coral is ranked as the 5th fastest growing city in America
BONUS FACT: It's 87 F outside today...blue sky and sunshine:-)
1) Cape Coral Florida real estate encompassed across 115 sq miles with 400 miles of canals
2) Cape Coral Florida has the second lowest crime rate in Florida
3) Cape Coral is ranked as the 5th fastest growing city in America
BONUS FACT: It's 87 F outside today...blue sky and sunshine:-)
Friday, June 23, 2006
US Census: Cape Coral Florida 5th Fastest in Growth
No, there's no Starbucks here. And you won't find a regional mall or any big name bookstores either.
But according to the lastest U.S. Census, Cape Coral remains the fifth-fastest growing city in the country!
This spells great news for owners of Cape Coral Florida real estate.
The report, released Tuesday, said the city grew at 9.2 percent from July 1, 2004, to July 1, 2005, reaching a total population of 140,000. Almost a year later, 154,000 people live here, based on city estimates. Cape also was No. 5 on the census growth chart in 2003-2004.
But according to the lastest U.S. Census, Cape Coral remains the fifth-fastest growing city in the country!
This spells great news for owners of Cape Coral Florida real estate.
The report, released Tuesday, said the city grew at 9.2 percent from July 1, 2004, to July 1, 2005, reaching a total population of 140,000. Almost a year later, 154,000 people live here, based on city estimates. Cape also was No. 5 on the census growth chart in 2003-2004.
Thursday, June 22, 2006
Why US real estate is Poised for Explosive Growth
This is a lengthy read, but well worth it.
To summarize:
The article I’ve pasted from “Growth Report” again substantiates the actual facts that we’ve mentioned which have:
a) driven US real estate in the past 3 yrs to record home sales, starts, and prices;
b) the reasons why we’ve seen a short correction and temporary cooling in previously hot sectors; and
c) why US - particularly Florida real estate - is poised for continued phenomenal long term growth.
Remember, we focus on Fact…not hype…and the Law of Supply & Demand is what drives this industry, property values, and the equitable profit we achieve. Satisfy your curiosity and read this important knowledge now.
It could just help you select the next market you’ll retire to, or invest in...Cape Coral, Florida real estate anyone?
====================================
By Nancy Zambell, Staff Writer, Big Idea Investor
In the past three years, the U.S. has experienced a housing boom that has not been seen since the aftermath of World War II when soldiers returning home fell head-over-heels in love with home ownership.
From coast-to-coast, home prices escalated beyond imagination, easily tripling in some markets like Washington D.C., South Florida, California and Phoenix. There were multiple reasons for the "perfect storm" of real estate appreciation.
============
First, real estate became a safe haven from the tumultuous stock market that came after the tech boom and bust of the last decade.
Second, low interest rates, which bottomed at 1% in June 2003, gave rise to free flowing mortgage money and the ability to buy and build much larger homes for the same monthly payment of yesterday.
Third, the 78 million-strong baby boomers population, many with overflowing coffers from their big salaries and prior good fortunes in the stock market, traded up to 5,000+ square feet McMansions that would have housed three generations in our grandparents' time - pushing up housing prices across the industry. The last American Housing survey, in 2003, found that nearly 3.2 million homes in the U.S. were 4,000 square feet or more - up 11% since 2001. And fourth, the rush to buy second homes and speculative investment properties and vacation homes for baby boomers created bidding wars in major cities and desirable vacation hot spots alike.
And not only did housing prices go to the moon, so did the stocks of the home builders and related sectors - to the tune of more than 30%, on average. Early investors were indeed very happy!
But beginning in the autumn of 2005, the bloom came off that rose.
The rise in interest rates first caused prospective homeowners to scale down, since larger houses became out of reach. Coupled with the reduced liquidity from the lackluster stock market of the last couple of years and the slower economy, the housing market has been slowly putting on the brakes.
Housing sales started softening, even in the "hot" markets with days on market, a measure of the number of days a house or condo is on the market before being sold, in places like South Florida lengthening from mere days or weeks to 3-4 months, and growing by five times in some markets.
My best friend decided to sell her Palm Beach County, Florida home last November; unfortunately at just the wrong time. As soon as she listed, eight other homes in her neighborhood went up for sale. Then, prices began to fall, a theme that is being played out in most of the regions across the country that saw the highest appreciation.
In the first four months of this year, according to the National Association of Home Builders and the National Association of Realtors, the volume of newly built homes sold fell 11.2%, while sales of existing houses fell 5.7%. The home builders expect housing starts to fall 13% this year, with new home sales forecast to drop about 9%. The result of this lessened demand is a drag on prices and ultimately, lower earnings for the home builders. Already we are seeing companies and analysts reducing earnings forecasts. So it's no surprise that the shares of the home builders have taken a beating lately.
But all is not lost.
While the age of the McMansions may be faltering, there is light at the end of the tunnel for more reasonably-sized and -priced homes.
After all, people still need a place to live.
Mid-market housing is continuing to thrive.
Many baby boomers have decided that taking care of a palace is not that much fun - or cheap! A large contingent is setting its eyes on retirement, and spending their golden years married to an oversized home is just not on these folks' agendas.
Not to mention the double-headed negatives of rising energy (12% boosts in electricity and 43% in natural gas heating costs, in the last 3 years) as well as increasing mortgage costs.
The change is upon us.
The inventory for $1 million-plus homes is averaging 13 months in several regions, more than twice the overall days on market. In Dallas, Texas, sales of 4+ bedrooms homes in the first quarter of this year fell by 31%,
yet sales of smaller houses rose 23%, a positive barometer for future gains in this market.
After all, the next generation coming up after the boomers is just about the same size, and they will all need a place to live, albeit a more modest one than their parents'.
Perhaps that is why the big funds, the insiders and the short sellers are not bailing out of this segment.
In fact, several privately-held home builders have recently been acquired, and at premium valuations. And as you can see from the table below, the change in insider and institutional holdings at the largest of the publicly-traded companies is fairly negligible, and in some cases has actually increased.
Likewise, the shorts have not been betting against the industry to any large extent.
But the result of the media slams and adverse Wall Street reports, which caused the retail investors to jump out, is perhaps, a good contra-indicator for savvy investors.
Just look at the price-earnings ratios of the builders below. When was the last time you saw P/E's in the 4-5 range?
We are rapidly concluding that many of these builders have been or are close to being oversold, and several even look attractive at these valuations.
Industry Toll Bros. (TOL) Centex
(CTX) Beazer
(BZH) DR Horton
(DHI) Pulte
(PHM) Hovnanian
(HOV) Lennar
(LEN) KB Homes
P/E 14.3 5.3 5.4 4.7 4.9 5.0 4.1 5.2 4.3
P/E Hi 5 yrs. 22.7 17.5 n/a 22.8 11.8 n/a
13.7 11.7 12.2
P/E Lo 5 yrs. 7.2 5.6 n/a 4.9 5.3 n/a 4.5 5.6 5.1
LTD/E .87 .72 1.21 .87 .82 .55 1.18 .56 0.0
Chg. In insider holdings 6 mos. n/a (.3%) (16.7%) (17.5%) 0.0% 0.0% (.9%) (1.1%) (1.9%)
Chg. In institutional holdings 6 mos. n/a 2.4% (2.0%) (9.8%) .5% 4.5% 11.2% (4.4%) .6%
Chg. In short interest 3 mos. n/a (7.3%) (10.5%) (14.3%) (2.2%) 36.9% 10.1% (.24%) 5.6%
While we are not yet recommending any of the builders, we will be watching them in the coming weeks and month, especially those with growing institutional interest. We are not expecting a return to the tremendous run-ups their shares saw in the last couple of years, but we also think there may be room to bottom-feed very soon, picking up some shares at very attractive prices. Stay tuned for more.
To summarize:
The article I’ve pasted from “Growth Report” again substantiates the actual facts that we’ve mentioned which have:
a) driven US real estate in the past 3 yrs to record home sales, starts, and prices;
b) the reasons why we’ve seen a short correction and temporary cooling in previously hot sectors; and
c) why US - particularly Florida real estate - is poised for continued phenomenal long term growth.
Remember, we focus on Fact…not hype…and the Law of Supply & Demand is what drives this industry, property values, and the equitable profit we achieve. Satisfy your curiosity and read this important knowledge now.
It could just help you select the next market you’ll retire to, or invest in...Cape Coral, Florida real estate anyone?
====================================
By Nancy Zambell, Staff Writer, Big Idea Investor
In the past three years, the U.S. has experienced a housing boom that has not been seen since the aftermath of World War II when soldiers returning home fell head-over-heels in love with home ownership.
From coast-to-coast, home prices escalated beyond imagination, easily tripling in some markets like Washington D.C., South Florida, California and Phoenix. There were multiple reasons for the "perfect storm" of real estate appreciation.
============
First, real estate became a safe haven from the tumultuous stock market that came after the tech boom and bust of the last decade.
Second, low interest rates, which bottomed at 1% in June 2003, gave rise to free flowing mortgage money and the ability to buy and build much larger homes for the same monthly payment of yesterday.
Third, the 78 million-strong baby boomers population, many with overflowing coffers from their big salaries and prior good fortunes in the stock market, traded up to 5,000+ square feet McMansions that would have housed three generations in our grandparents' time - pushing up housing prices across the industry. The last American Housing survey, in 2003, found that nearly 3.2 million homes in the U.S. were 4,000 square feet or more - up 11% since 2001. And fourth, the rush to buy second homes and speculative investment properties and vacation homes for baby boomers created bidding wars in major cities and desirable vacation hot spots alike.
And not only did housing prices go to the moon, so did the stocks of the home builders and related sectors - to the tune of more than 30%, on average. Early investors were indeed very happy!
But beginning in the autumn of 2005, the bloom came off that rose.
The rise in interest rates first caused prospective homeowners to scale down, since larger houses became out of reach. Coupled with the reduced liquidity from the lackluster stock market of the last couple of years and the slower economy, the housing market has been slowly putting on the brakes.
Housing sales started softening, even in the "hot" markets with days on market, a measure of the number of days a house or condo is on the market before being sold, in places like South Florida lengthening from mere days or weeks to 3-4 months, and growing by five times in some markets.
My best friend decided to sell her Palm Beach County, Florida home last November; unfortunately at just the wrong time. As soon as she listed, eight other homes in her neighborhood went up for sale. Then, prices began to fall, a theme that is being played out in most of the regions across the country that saw the highest appreciation.
In the first four months of this year, according to the National Association of Home Builders and the National Association of Realtors, the volume of newly built homes sold fell 11.2%, while sales of existing houses fell 5.7%. The home builders expect housing starts to fall 13% this year, with new home sales forecast to drop about 9%. The result of this lessened demand is a drag on prices and ultimately, lower earnings for the home builders. Already we are seeing companies and analysts reducing earnings forecasts. So it's no surprise that the shares of the home builders have taken a beating lately.
But all is not lost.
While the age of the McMansions may be faltering, there is light at the end of the tunnel for more reasonably-sized and -priced homes.
After all, people still need a place to live.
Mid-market housing is continuing to thrive.
Many baby boomers have decided that taking care of a palace is not that much fun - or cheap! A large contingent is setting its eyes on retirement, and spending their golden years married to an oversized home is just not on these folks' agendas.
Not to mention the double-headed negatives of rising energy (12% boosts in electricity and 43% in natural gas heating costs, in the last 3 years) as well as increasing mortgage costs.
The change is upon us.
The inventory for $1 million-plus homes is averaging 13 months in several regions, more than twice the overall days on market. In Dallas, Texas, sales of 4+ bedrooms homes in the first quarter of this year fell by 31%,
yet sales of smaller houses rose 23%, a positive barometer for future gains in this market.
After all, the next generation coming up after the boomers is just about the same size, and they will all need a place to live, albeit a more modest one than their parents'.
Perhaps that is why the big funds, the insiders and the short sellers are not bailing out of this segment.
In fact, several privately-held home builders have recently been acquired, and at premium valuations. And as you can see from the table below, the change in insider and institutional holdings at the largest of the publicly-traded companies is fairly negligible, and in some cases has actually increased.
Likewise, the shorts have not been betting against the industry to any large extent.
But the result of the media slams and adverse Wall Street reports, which caused the retail investors to jump out, is perhaps, a good contra-indicator for savvy investors.
Just look at the price-earnings ratios of the builders below. When was the last time you saw P/E's in the 4-5 range?
We are rapidly concluding that many of these builders have been or are close to being oversold, and several even look attractive at these valuations.
Industry Toll Bros. (TOL) Centex
(CTX) Beazer
(BZH) DR Horton
(DHI) Pulte
(PHM) Hovnanian
(HOV) Lennar
(LEN) KB Homes
P/E 14.3 5.3 5.4 4.7 4.9 5.0 4.1 5.2 4.3
P/E Hi 5 yrs. 22.7 17.5 n/a 22.8 11.8 n/a
13.7 11.7 12.2
P/E Lo 5 yrs. 7.2 5.6 n/a 4.9 5.3 n/a 4.5 5.6 5.1
LTD/E .87 .72 1.21 .87 .82 .55 1.18 .56 0.0
Chg. In insider holdings 6 mos. n/a (.3%) (16.7%) (17.5%) 0.0% 0.0% (.9%) (1.1%) (1.9%)
Chg. In institutional holdings 6 mos. n/a 2.4% (2.0%) (9.8%) .5% 4.5% 11.2% (4.4%) .6%
Chg. In short interest 3 mos. n/a (7.3%) (10.5%) (14.3%) (2.2%) 36.9% 10.1% (.24%) 5.6%
While we are not yet recommending any of the builders, we will be watching them in the coming weeks and month, especially those with growing institutional interest. We are not expecting a return to the tremendous run-ups their shares saw in the last couple of years, but we also think there may be room to bottom-feed very soon, picking up some shares at very attractive prices. Stay tuned for more.
Wednesday, June 21, 2006
US Dept of Commerce Real Estate Data
The US Dept of Commerce released it's quarterly Housing report yesterday.
This spelled good news for current real estate owners and investors in
Cape Coral, Florida and abroad.
Because housing starts are up 5% to 1,957,000 units!
Thursday, June 15, 2006
Florida real estate & National - a Strong Housing Outlook
The following is an interesting article by Van Eck-Tillman Advisories, Inc.
As real estate owners, we focus on fact and not hype...(FYI Adrian Van Eck has not been wrong in 32 years)
GET READY FOR THE ALL-CLEAR SIGNAL IN HOUSING FROM ADRIAN VAN ECK!
He says most investors are real estate investors without thinking about it, because they own one or more homes.
When they do think about their holdings they have reason to be concerned. An army of self-anointed “experts” on financial TV broadcast stations now stare out at them and warn them that a horrible once-in-every-generation collapse in real estate and banking is rushing toward us, driven they claim by high interest rates.
Actually, mortgage rates are in a region where many housing booms traditionally begin. And this may come as a surprise to you, but A NEW BOOM IN HOUSING AND REAL ESTATE IS PRECISELY WHAT ADRIAN SEES COMING.
And before you protest that this is not what the men and women in the financial media are telling you, think on this fact: Adrian Van Eck has a personal history in this field going back more than 40 years. E
ight of those years were filled with meaningful contact with real estate developers, builders, Realtors and mortgage lenders. And the last 32 years have seen him develop a reputation as an editor - without equal for forecasting the future in both banking and real estate. This solid record of seeing ahead grows out of his incredible insight into the actions and intentions of The Federal Reserve System.
Read on
*******
Adrian Van Eck's Mortgage and Property HotlineFor: Thursday, June 1, 2006 THE NEWEST DATA FROM REALTORS - AN 11.7% DECLINE IN PENDING HOME SALES - IS CONSISTENT WITH MY VIEW THAT THE HOUSING MARKET IS STILL REACTING TO AN ENORMOUS NEGATIVE HYPE IN THE MEDIA.
I THINK MANY BUYERS HAVE MOVED TO THE SIDELINES WAITING FOR A COLLAPSE IN PRICES - A COLLAPSE THAT SIMPLY IS NOT IN THE CARDS.
A LOT OF THESE PEOPLE ARE GOING TO BE CAUGHT BY SURPRISE WHEN THEY DISCOVER THAT THE HOUSING TRAIN IS STILL IN MOTION AND WHEN THEY RUN TO JUMP ABOARD THEY WILL HAVE TO PAY MORE THAN TODAY'S PRICES! EVERYONE I TALK TO TELLS ME THAT “THEY HAVE HEARD” HOME PRICES ARE COMING DOWN SHARPLY RIGHT NOW.
WELL, THERE HAVE BEEN SOME CORRECTIONS IN A FEW OVERPRICED MARKETS, NOTABLY THE SAN FRANCISCO AREA. BUT FOR THE MOST PART, THE SO-CALLED PRICE DECLINES BEING RUMORED IN COCKTAIL PARTY AND BACKYARD COOKOUT GOSSIP AROUND THE NATION ARE NOT BACKED BY STATISTICS READILY AVAILABLE.
I am convinced that what is behind the gossip is the fact that many would-be sellers had posted their homes at greatly inflated prices earlier in the year. They had heard of prices going up at a 10% to 20% annual rate in a few isolated overheated areas around the nation and had convinced themselves that their house was worth maybe 20% above what they had been quoted by a Realtor. After their homes sat on the market for months, neglected by homebuyers, they have agreed to mark their price down to market levels.
That accounts for some ads in the newspapers with small headlines announcing “reduced 20%”. But a reduction in asking price does not constitute a true cut in home prices - even though that is the way many people mistakenly look at it. THE LATEST COMMERCE DEPARTMENT DATA SHOWS THE MEDIAN PRICE OF A NEW HOME ROSE TO $238,500.
THAT WAS A GAIN OF 2.8% FROM MARCH AND AN INCREASE OF 0.9% FROM A YEAR EARLIER. That sounds to me like a bull’s eye for the Federal Reserve. Fed Chairman Dr. Ben Bernanke is under increasingly vicious assault on Wall Street for “not being another Alan Greenspan.”
(THE BOND-MARKET-DRIVEN SPOKESMEN ON WALL STREET WANT HOME PRICES TO COLLAPSE, KNOCKING DOWN INTEREST RATES AND PUSHING UP BOND PRICES. GREENSPAN GAVE THEM THIS SWEET MOMENT TWICE AND THEY WANT IT AGAIN.) But Dr. Bernanke told Congress just days ago that he and the Fed watch housing closely and are satisfied that it is in the process of forming a soft landing. (That is the Fed's goal, he said.)
A 0.9% increase in median New Home Prices is a soft landing from the ridiculous levels of price hikes during the two previous years.
From time to time I mention that the historic upward trend for home prices runs consistently at 5% per year. This average has persisted for decades, through war, peace, booms and recessions. It does not mean that prices follow the trend in lockstep. Sometimes they go above trend and have to come back down to the line. Other times they fall below trend and have to race to catch up.
(That is what happened early in this decade.) Some observers then decide that housing will continue to go up in price at such an accelerated rate. Others look at the situation with short-term blinders on and proclaim a bubble has formed and it must be popped, with home prices falling sharply. Both groups are wrong.
This is just a normal herky-jerky movement of home prices. They are driven in the end by the availability of money and the rising income levels of buyers. I told you a while ago that England was running ahead of us in its housing cycle. They had a period of shocking price gains, followed by a slowdown in buying activity. Recently, sales and prices turned up again, with the most-recent home price report up 4.9% in one year.
Here is the way Stanley Read of Business Week writes about what he calls a new English real estate boomlet: “Americans who lie awake at night worrying that the prices of their homes will fall off a wall like Humpty Dumpty can take comfort in the experience of Londoners. After house prices in the British capital racked up double-digit gains seven years in a row through 2003, forecasters predicted a nasty snapback.
So far it has not happened.” “In fact, there are signs prices are beginning to resume their upward climb. Sure, last year London's real estate market saw a sharp slowdown. Buyers, no doubt influenced by all the talk of a crash, kept their powder dry.
But that only caused demand to build up, and now the spark is back. First quarter sales grew 41% from a year ago. Instead of seeing houses languishing on the market, real estate sales agents say they can't find enough houses to sell.” (End quote). THE BANK OF ENGLAND TOOK STEPS TO STOP THE HOUSING DECLINE AND TURN SALES BACK UP. THE FEDERAL RESERVE WILL DO THE SAME HERE IF IT SHOULD BE NECESSARY. More next week. Adrian Van Eck. Next hotline updated no later than 3:00 P.M. Eastern on Thursday, June 8, 2006
As real estate owners, we focus on fact and not hype...(FYI Adrian Van Eck has not been wrong in 32 years)
GET READY FOR THE ALL-CLEAR SIGNAL IN HOUSING FROM ADRIAN VAN ECK!
He says most investors are real estate investors without thinking about it, because they own one or more homes.
When they do think about their holdings they have reason to be concerned. An army of self-anointed “experts” on financial TV broadcast stations now stare out at them and warn them that a horrible once-in-every-generation collapse in real estate and banking is rushing toward us, driven they claim by high interest rates.
Actually, mortgage rates are in a region where many housing booms traditionally begin. And this may come as a surprise to you, but A NEW BOOM IN HOUSING AND REAL ESTATE IS PRECISELY WHAT ADRIAN SEES COMING.
And before you protest that this is not what the men and women in the financial media are telling you, think on this fact: Adrian Van Eck has a personal history in this field going back more than 40 years. E
ight of those years were filled with meaningful contact with real estate developers, builders, Realtors and mortgage lenders. And the last 32 years have seen him develop a reputation as an editor - without equal for forecasting the future in both banking and real estate. This solid record of seeing ahead grows out of his incredible insight into the actions and intentions of The Federal Reserve System.
Read on
*******
Adrian Van Eck's Mortgage and Property HotlineFor: Thursday, June 1, 2006 THE NEWEST DATA FROM REALTORS - AN 11.7% DECLINE IN PENDING HOME SALES - IS CONSISTENT WITH MY VIEW THAT THE HOUSING MARKET IS STILL REACTING TO AN ENORMOUS NEGATIVE HYPE IN THE MEDIA.
I THINK MANY BUYERS HAVE MOVED TO THE SIDELINES WAITING FOR A COLLAPSE IN PRICES - A COLLAPSE THAT SIMPLY IS NOT IN THE CARDS.
A LOT OF THESE PEOPLE ARE GOING TO BE CAUGHT BY SURPRISE WHEN THEY DISCOVER THAT THE HOUSING TRAIN IS STILL IN MOTION AND WHEN THEY RUN TO JUMP ABOARD THEY WILL HAVE TO PAY MORE THAN TODAY'S PRICES! EVERYONE I TALK TO TELLS ME THAT “THEY HAVE HEARD” HOME PRICES ARE COMING DOWN SHARPLY RIGHT NOW.
WELL, THERE HAVE BEEN SOME CORRECTIONS IN A FEW OVERPRICED MARKETS, NOTABLY THE SAN FRANCISCO AREA. BUT FOR THE MOST PART, THE SO-CALLED PRICE DECLINES BEING RUMORED IN COCKTAIL PARTY AND BACKYARD COOKOUT GOSSIP AROUND THE NATION ARE NOT BACKED BY STATISTICS READILY AVAILABLE.
I am convinced that what is behind the gossip is the fact that many would-be sellers had posted their homes at greatly inflated prices earlier in the year. They had heard of prices going up at a 10% to 20% annual rate in a few isolated overheated areas around the nation and had convinced themselves that their house was worth maybe 20% above what they had been quoted by a Realtor. After their homes sat on the market for months, neglected by homebuyers, they have agreed to mark their price down to market levels.
That accounts for some ads in the newspapers with small headlines announcing “reduced 20%”. But a reduction in asking price does not constitute a true cut in home prices - even though that is the way many people mistakenly look at it. THE LATEST COMMERCE DEPARTMENT DATA SHOWS THE MEDIAN PRICE OF A NEW HOME ROSE TO $238,500.
THAT WAS A GAIN OF 2.8% FROM MARCH AND AN INCREASE OF 0.9% FROM A YEAR EARLIER. That sounds to me like a bull’s eye for the Federal Reserve. Fed Chairman Dr. Ben Bernanke is under increasingly vicious assault on Wall Street for “not being another Alan Greenspan.”
(THE BOND-MARKET-DRIVEN SPOKESMEN ON WALL STREET WANT HOME PRICES TO COLLAPSE, KNOCKING DOWN INTEREST RATES AND PUSHING UP BOND PRICES. GREENSPAN GAVE THEM THIS SWEET MOMENT TWICE AND THEY WANT IT AGAIN.) But Dr. Bernanke told Congress just days ago that he and the Fed watch housing closely and are satisfied that it is in the process of forming a soft landing. (That is the Fed's goal, he said.)
A 0.9% increase in median New Home Prices is a soft landing from the ridiculous levels of price hikes during the two previous years.
From time to time I mention that the historic upward trend for home prices runs consistently at 5% per year. This average has persisted for decades, through war, peace, booms and recessions. It does not mean that prices follow the trend in lockstep. Sometimes they go above trend and have to come back down to the line. Other times they fall below trend and have to race to catch up.
(That is what happened early in this decade.) Some observers then decide that housing will continue to go up in price at such an accelerated rate. Others look at the situation with short-term blinders on and proclaim a bubble has formed and it must be popped, with home prices falling sharply. Both groups are wrong.
This is just a normal herky-jerky movement of home prices. They are driven in the end by the availability of money and the rising income levels of buyers. I told you a while ago that England was running ahead of us in its housing cycle. They had a period of shocking price gains, followed by a slowdown in buying activity. Recently, sales and prices turned up again, with the most-recent home price report up 4.9% in one year.
Here is the way Stanley Read of Business Week writes about what he calls a new English real estate boomlet: “Americans who lie awake at night worrying that the prices of their homes will fall off a wall like Humpty Dumpty can take comfort in the experience of Londoners. After house prices in the British capital racked up double-digit gains seven years in a row through 2003, forecasters predicted a nasty snapback.
So far it has not happened.” “In fact, there are signs prices are beginning to resume their upward climb. Sure, last year London's real estate market saw a sharp slowdown. Buyers, no doubt influenced by all the talk of a crash, kept their powder dry.
But that only caused demand to build up, and now the spark is back. First quarter sales grew 41% from a year ago. Instead of seeing houses languishing on the market, real estate sales agents say they can't find enough houses to sell.” (End quote). THE BANK OF ENGLAND TOOK STEPS TO STOP THE HOUSING DECLINE AND TURN SALES BACK UP. THE FEDERAL RESERVE WILL DO THE SAME HERE IF IT SHOULD BE NECESSARY. More next week. Adrian Van Eck. Next hotline updated no later than 3:00 P.M. Eastern on Thursday, June 8, 2006
Monday, June 12, 2006
Cape Coral Real Estate in the NorthWest - a Bad Impact?
An interesting article today with a school proposal - in our opinion, if the vote is passed, it would negatively affect values in the area. Thankfully there are years left until anything comes to fruition, but if you have property there now or are looking in the NorthWest end, you must read this article....
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Land-use change would accommodate ALC WestSchool for troubled students may relocate in northeast Cape
By Jason Wermersjwermers@news-press.comOriginally posted on June 11, 2006
A school that serves as a last chance for troubled middle and high school students may be headed for northeast Cape Coral in the next couple of years.
Cape Coral City Council unanimously approved a change last week in the land-use plan for 1426 Del Prado Blvd. N. that would allow the Lee County School District to move Alternative Learning Center West into a permanent building there. The school is currently in portables near North Fort Myers Academy for the Arts.
Councilman Tim Day, whose district includes the proposed site of ALC West, said he welcomes the school.
"I think these kids are in a critical situation in their lives, where they are in danger of being thrown out of the regular public school system," he said. "It's another opportunity for them before they get expelled. We have many kids from the city of Cape Coral in that gray area."
ALC West serves students in the school district's West Zone, which includes Cape Coral and part of North Fort Myers.
The proposal next goes to the Florida Department of Community Affairs, which will review the change and offer comments on how well it conforms with the city's comprehensive land-use plan.
The district also needs to justify to the state Department of Education the need for the school to have a permanent facility to the state Department of Education. The district has another Alternative Learning Center, called ALC Central, in Fort Myers.
The council would then have to grant final approval before the school can be built.
When the school year ended May 25, ALC West had 102 middle school students and 82 high school students for a total of 184. This was the first year ALC West existed.
City Councilman Jim Jeffers said he would like to have some questions answered before ALC West receives final approval. He felt his questions were not adequately answered at Monday's council meeting.
"I don't necessarily have a problem with schools being located coterminously or within a residential neighborhood," he said. "But with an alternative learning center, I would need some questions answered about its security issues and what kind of (academic) programming is intended to be placed in there."
ALC West Principal Derrick Donnell said his students continue the same academic plan they had when they were in regular school. Students stay between 45 days and a year, depending on the length of their suspension from their home school.
"Our goal is that after their stay here, they will be able to pick up where they left off," he said.
Donnell added that his school's environment is more strict than that of a traditional public school because of its small size. For the approximately 200 students who are there at any given time, the school has three security guards and a full-time sheriff's deputy.
"That would be on the short end of a high school, but on the large end of an elementary school," he said.
For anyone who might be worried that these students pose a risk to the nearby neighborhood, Day pointed out that many already live in the city.
"They live in the Cape right now," Day said. "People shouldn't worry any more about them being there than them being in your neighborhood. It's not a prison. They learn study skills and much better work habits in terms of getting schoolwork done, and they get discipline — a heavy dose."
Rolando Oramas, who lives on Northeast 15th Avenue, just behind where the school would go, said he does not have a problem with it.
"It's a good idea," said Oramas, 60, who has lived in the neighborhood for nearly a year. "They've got to have someplace to learn."
Donnell said it is unfortunate that students coming to ALC West get a stigma attached to them.
"People think, 'Oh, they're the bad kids,'" Donnell said. "That couldn't be further from the truth. They just made bad choices. This is their opportunity, a last-chance facility, to get back to regular school."
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Land-use change would accommodate ALC WestSchool for troubled students may relocate in northeast Cape
By Jason Wermersjwermers@news-press.comOriginally posted on June 11, 2006
A school that serves as a last chance for troubled middle and high school students may be headed for northeast Cape Coral in the next couple of years.
Cape Coral City Council unanimously approved a change last week in the land-use plan for 1426 Del Prado Blvd. N. that would allow the Lee County School District to move Alternative Learning Center West into a permanent building there. The school is currently in portables near North Fort Myers Academy for the Arts.
Councilman Tim Day, whose district includes the proposed site of ALC West, said he welcomes the school.
"I think these kids are in a critical situation in their lives, where they are in danger of being thrown out of the regular public school system," he said. "It's another opportunity for them before they get expelled. We have many kids from the city of Cape Coral in that gray area."
ALC West serves students in the school district's West Zone, which includes Cape Coral and part of North Fort Myers.
The proposal next goes to the Florida Department of Community Affairs, which will review the change and offer comments on how well it conforms with the city's comprehensive land-use plan.
The district also needs to justify to the state Department of Education the need for the school to have a permanent facility to the state Department of Education. The district has another Alternative Learning Center, called ALC Central, in Fort Myers.
The council would then have to grant final approval before the school can be built.
When the school year ended May 25, ALC West had 102 middle school students and 82 high school students for a total of 184. This was the first year ALC West existed.
City Councilman Jim Jeffers said he would like to have some questions answered before ALC West receives final approval. He felt his questions were not adequately answered at Monday's council meeting.
"I don't necessarily have a problem with schools being located coterminously or within a residential neighborhood," he said. "But with an alternative learning center, I would need some questions answered about its security issues and what kind of (academic) programming is intended to be placed in there."
ALC West Principal Derrick Donnell said his students continue the same academic plan they had when they were in regular school. Students stay between 45 days and a year, depending on the length of their suspension from their home school.
"Our goal is that after their stay here, they will be able to pick up where they left off," he said.
Donnell added that his school's environment is more strict than that of a traditional public school because of its small size. For the approximately 200 students who are there at any given time, the school has three security guards and a full-time sheriff's deputy.
"That would be on the short end of a high school, but on the large end of an elementary school," he said.
For anyone who might be worried that these students pose a risk to the nearby neighborhood, Day pointed out that many already live in the city.
"They live in the Cape right now," Day said. "People shouldn't worry any more about them being there than them being in your neighborhood. It's not a prison. They learn study skills and much better work habits in terms of getting schoolwork done, and they get discipline — a heavy dose."
Rolando Oramas, who lives on Northeast 15th Avenue, just behind where the school would go, said he does not have a problem with it.
"It's a good idea," said Oramas, 60, who has lived in the neighborhood for nearly a year. "They've got to have someplace to learn."
Donnell said it is unfortunate that students coming to ALC West get a stigma attached to them.
"People think, 'Oh, they're the bad kids,'" Donnell said. "That couldn't be further from the truth. They just made bad choices. This is their opportunity, a last-chance facility, to get back to regular school."
Tuesday, June 06, 2006
Pretty Vegas - Ugly Real Estate Market
This is the 3rd time I've been to Las Vegas in 8 months.
I love the vibe this city throws off! I don't gamble, I'm not a heavy drinker, and I'm happily married and don't 'play around' so those aren't the things that attract me here....
What does attract me are the phenomenal sites, shows, and energy this entertainment city has.
But in terms of real estate, Las Vegas is an ugly market. Many speculators have suffered and there's been some depreciation.
Homes last on the market for nine to twelve months. It's an ugly time and there's no sign of the real estate market here turning around anytime soon.
Thankfully Florida real estate and Cape Coral continue to flourish! But Cape Coral real estate doesn't hide behind a pretend mask of sights and sounds.
It's beautiful Florida property set out in one of the best cities to live in throughout the United States!
Browse our site and find great buys right now, and email or call us with any questions you may have.
Make it an excellent day.
I love the vibe this city throws off! I don't gamble, I'm not a heavy drinker, and I'm happily married and don't 'play around' so those aren't the things that attract me here....
What does attract me are the phenomenal sites, shows, and energy this entertainment city has.
But in terms of real estate, Las Vegas is an ugly market. Many speculators have suffered and there's been some depreciation.
Homes last on the market for nine to twelve months. It's an ugly time and there's no sign of the real estate market here turning around anytime soon.
Thankfully Florida real estate and Cape Coral continue to flourish! But Cape Coral real estate doesn't hide behind a pretend mask of sights and sounds.
It's beautiful Florida property set out in one of the best cities to live in throughout the United States!
Browse our site and find great buys right now, and email or call us with any questions you may have.
Make it an excellent day.
Monday, June 05, 2006
Florida Real Estate & Cape Coral Getting Hotter
That's right, the temperature is rising down South.
Interest rates are slowly creeping up and keeping pace with the mercury in Cape Coral, migration into Florida remains strong, and Cape Coral real estate continues to offer excellent opportunities for buyers and re-locators alike.
Interest rates are slowly creeping up and keeping pace with the mercury in Cape Coral, migration into Florida remains strong, and Cape Coral real estate continues to offer excellent opportunities for buyers and re-locators alike.
