Not to startle anyone, but something seems completely screwy with the housing market. As we noted yesterday in our post "Valley Real Estate Market Mania," median home prices are up, but so is inventory, and condo sales are down. And today, from Lansner on Real Estate, we see that rental prices are steadily marching upward as those shut out of the housing market snap up apartments. A reader sent us this link from Professor Piggington's with the ominous comment: "Now is not the time to be buying real estate - despite what any agent is telling you. They're soooooo gonna be out of a job soon." Well we read the article and learned some interesting stuff, such as:
"This may be a little counterintuitive to people like me who have been expecting a housing slowdown for years, but this is a simple mathematical concept: Downturns usually start at the bottom of the market and work their way up. This particular slowdown in San Diego is playing out the same way. As the lower end of the market sits, waiting for a sale, only the higher end sale prices are calculated in the averages. Thus, the collapsing sales market translates into increasing median prices.So, we know we have some homebuilders/agents/home buyers/ and amateur economists who read this site. If you'd like to join the fray and give us your thoughts, we'll flip the little switch and open up comments on this thread. Tell us what you think.
This has probably been occurring to some extent for a while, but the statistical up-trend is not completely done with regard to housing prices. Keep an eye on sale volume, days on market, and prices in individual, smaller markets for a more accurate look at the health of your market. As crazy as the market has been, until recently we had the sales volume to support the growing sales prices. I expect most media sources will focus nearly solely on the increasing median prices into the near future."
· Valley Real Estate Market Mania [Curbed LA]
· a surge in median price coming? Beware [Professor Piggington's]