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Headed for a housing bubble?

By Judy Martel · Bankrate.com
Monday, July 8, 2013
Posted: 6 am ET

Soaring home prices, lack of inventory and bidding wars in parts of the country are prompting some analysts and investors to start using the B-word again: bubble.

Fears that prices are rising too far, too fast have led to predictions that the market won't be sustainable. "Prices in some areas are just out of control," Scott Tamkin with Keller Williams Realty in Los Angeles told CNBC. "As soon as a good property comes on the market at a reasonable price, bam! It's gone in multiple offers, oftentimes in cash," he said.

Rick Sharga, executive vice president at Carrington Mortgage Holdings in Santa Ana, Calif., reported similar experiences in a previous interview. In parts of California, he estimates, 70 percent of the homes sold have multiple bids.

In markets such as Phoenix, Las Vegas, Los Angeles and parts of Florida, where prices plummeted during the housing bust, a lack of inventory and high investor activity has driven up home prices as buyers compete for the few properties on the market.

Meanwhile, the party appears to be ending for housing stocks, hampered by expectations of rising mortgage interest rates. In June, the index that measures housing stocks marked the largest drop in a year. The major building companies, including DR Horton, Pulte, Lennar, and Ryland, all saw losses after performing well over the past year.

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26 Comments
cin
July 10, 2013 at 9:38 am

No, no, no! I'm so sick of hearing this story that is being cooked up by realtors. Enough!! I know of several regions in this country(Phil suburbs where I live, Shaker Hgt. Oh, Winnetka, Il) where this is not the case. I remember all too well realtors strongly encouraging us to put in a high bid for a home because of demand. Usually this turned out to be false. They are SALESMEN first. Please remember this when you hear the reports coming from their biased sources. Buyer beware. Realtors have no skin in the game. When you rely on commission you need a $$check. They are happy to price them low and watch them go. We can sell on our own. There are so many resources on the web to do this. I absolutely refuse to pay a 6% commission on a sale that is 30-40% below value!!

Frank Pegues
July 10, 2013 at 3:28 am

Good going Jason I'm with you...

DEBBIE
July 10, 2013 at 2:30 am

WHAT THE HECK DOES BUBBLE REALLY MEAN????

DEBBIE
July 10, 2013 at 2:29 am

BILL MAYES IS RIGHT TOO. I LIVE IN LAKE STEVENS, WA. NEVER MISSED A PAYMENT IN ALMOST 20 YRS NO RETIRED, WHERE IS THE HELP? DOES ANYONE HAVE A PERFECT FIX IN MY SITUATION?

DEBBIE
July 10, 2013 at 2:25 am

LOV EDWARD PARKERS COMMENT, U GOT THAT RIGHT, MY HOME IS STILL 150 G'S UNDER. AND UNDER WATER SO NO ONE WILL TOUCH US TO RE-FI TO LOWER RATE DUE TO WONT APPRISE FOR WHAT WE OWE, THIS IS WHY SO MANY R WALKING AWAY, NO PAYMENTS TIL KICKED OUT, ATLEAST U CAN END UP W/SOME BUCKS. WE HAVE TRIED SO MANY WAYS W/O ANY LUCK, WE MIGHT HAVE TO WALK TOO, SO WHY DONT THEY HELP? DONT THINK THEY WOULD WANT US TO WALK, RE; THE PRES. PACKAGE ETC, WELL IT SURE ISNT WORKING FOR US. SO YES EDWARD U R RIGHT. GOOD FOR U.

Edward Parker
July 10, 2013 at 1:57 am

Gee, I am confused as to what part of the country Jason is living in,whenrefers to the "democrats"improving the economy?wonder if he listens to the news? Is he aware of the trillion dollar deficit,the largest in history,that the dems have taken us to,and the rate of unemployment...worst ever...need to become more educated...must be listening to msnbc,the liberal news,that is so biased,and in bed with the administration...the economy in my part of the country is terrible..the realtor is correct...their is no housing bubble,and prices remain low..and are selling much lower often times,lower than their purchase price,which was way inflated..banks are not giving mortgages...it's very difficult for people to,get a mortgage..banks have reversed their role,and gone the other way,making it difficult for all. The economy is improving?..where?

Jason Miller
July 09, 2013 at 10:12 pm

There is no new housing bubble. It is just conservative Republicans trying to cause panic because the Democrats are improving the economy and ruining the chances for any Republican presidential candidate in 2016.

Christina
July 09, 2013 at 6:37 pm

When the media starts with this " bubble" staff sure is because they know they are not bright people out there believing it.
No way on my area Senoia GA ( where the " Walking Dead" TV show is been shot), the market is getting up. You go guys boost the economy.

Realtor in SW Florida
July 09, 2013 at 5:41 pm

Prices are rising. A bubble? Not in our area. Although prices are "rising" 10-20% over last year in our area (depending on what type of property), we are still way below a standard market value for our area using calculations based on before the last bubble in a normal market. I think using the word "bubble" starts a false buzz that things are jumping and is a headline hype to get readers to read your article. People are a lot smarter than they were 7-9 years ago after what happened and will be more careful before they overpay for a property (if paying cash - banks won't give mortgages on overpriced properties) and with the banks not wanting to lend except to people who don't need mortgages, won't keep accelerating at an overinflated price - just back to normal range. Investors won't pay an overinflated price and they are the main purchasers at this time in our area. I agree with Larry and I have been a licensed Broker in Florida since 1988. With regard to Cin, most Realtors that I know are more educators than SALES PEOPLE. We educate our clients to make the best decisions for themselves and that is how most of us make a living with repeat clients. You can't SELL a home by force to someone and people should ask for a market analysis or an appraisal if they are unsure of the value just like you would with any major purchase. If you are working with a good Realtor, you know the value based on what properties are available in the market (and what has sold) and most of my clients are smart enough to know when or if someone is SELLING them something. You have either never bought a home or may have had a bad personal experience and weren't knowledgeable enough to be able to know what you were doing and didn't have a professional educate you on the market you were looking in and I am sorry for you that you had that experience. This is not an insult, just so far from the professionals I have known in over 25 years of practicing real estate in my area and those professionals who I have known throughout the US. As with any occupation, doctors, lawyers, salespeople, etc., there are always a few that are bad, but they are few and far between and our profession doesn't deserve a blanket statement like that about the majority of Realtors who work very hard.

Bill Mayes
July 09, 2013 at 12:44 pm

The idea of home ownership being the American dream is a bunch of hogwash.
Far too often people are convinced that they can afford a mortgage ans yet what happens? The homes are foreclosed.

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