Tuesday, March 27, 2012

Bidding Wars Erupt for Homes in...

...Silicon Valley, Miami, Seattle and Washington D.C.

Bloomberg reports:
Bidding wars, absent from most parts of the U.S. residential market since its peak in 2006, are erupting from Seattle and Silicon Valley to Miami and Washington, D.C. The inventory of homes hovers close to a six-year low, while an increase in jobs and record affordability are tempting more buyers. The number of contracts to buy previously owned homes jumped 14 percent in February from a year earlier, the National Association of Realtors reported yesterday...

While listings will probably rise as banks accelerate foreclosures and sellers gain confidence in the market, the U.S. metropolitan areas with the strongest economies may be ready to absorb the additional inventory, said Mark Zandi, chief economist for Moody’s Analytics...

Low values and interest rates have made buying a better deal than renting in 98 of the largest 100 metropolitan areas, according to Trulia Inc.
Overall,home prices dropped 3.8 percent in January from a year earlier, according to the the S&P/Case-Shiller index.The housing market never cleared properly during the Great Recession, because of government meddling in the sector. As the overhang clears, the housing sector will, again, heat up in areas beyond Miami and Silicon Valley. You guessed it, all because of Fed money printing.

The sectors now climbing are mostly where the Fed money is first flowing, Silicon Valley and Seattle because of their venture capital high tech sectors, D.C. because Fed money printing finds its way to the federal government and Miami because foreign investors are dumping their dollars for hard assets. Eventually, this money will work its way across the country. I expect the midwest farm belt and Chicago to be next in line for higher prices. Buy now, or forever be a victim of Fed money printing.


  1. "Buy now, or forever be a victim of Fed money printing."

    Fu..! After so long looking at this housing bubble, waiting for price adjustments that never really came, expecting taxes and job losses to increase in the future, that's a hard pill to swallow.

    Key word is, "buy"?
    You don't mean take out a low down adjustable mortgage, or even a traditional one? Do you?

    Just go out and get the biggest dang loan possible?

    With a crash apt to come sometime down the line isn't it better to be mobile and be able to go to where the job might be?

    Jim Rogers says, "Gold To Rise Much Higher in This Decade, Do Not Sell It"

    Marc Faber said, I will never sell my gold.

    With what little gold I have I was hoping to be able to trade it for real estate sometime down the line. Your saying this is a bad move?

    Gary North has an article titled, What Will You Do With Your Gold? where he writes, "I tell you that you will not sell your precious metals during the mania." ... Am I falling into a trap by not selling now? Yeesh, am I soon to be Aunt Rosa?

    Decisions, decisions. I hate this uncertainty.

  2. "Buy now, or forever be a victim of Fed money printing."

    That sounds a lot like the phrase the realtors were using for a long time now, "Buy now, or be priced out forever"

    As it turned out, they were a bit wrong, especially when they said it prior to 2007.

    So that's another reason why your statement is a bitter pill to swallow.

    As a serious student of The Housing Bubble Blog since it's beginning, around 2004 (but I've stopped going there and come here now) I've kept in my mind the realtor's other saying, "They aren't building any more land" and compared that to the wide open expansive stretches of undeveloped land in many areas. It's made renting, bearable... until now.

    Anyway, the phrase, "Buy now, or forever be a victim of Fed money printing." carries a lot of weight seeing as how it's coming from you and not some realtor.

    Shifting gears is hard.
    This must be what it will be like for many People when the time comes to sell their gold?

    Or is there some strategy where a Person doesn't have to sell their gold, yet profit from it as if they did? I've read some internet writers suggest such, but you have to pay a bunch of money to find out and I'm too much of a tight wad to risk seeing if what they suggest is possible.