Why Housing Is About to Go "Pop!"

[okieinpain]

http://www.msnbc.msn.com/id/4724213/

is greenspan putting the country at risk to prop up bush until the election.

[tlcandie]

1. Link not working for me ...

:shrug:

[Mithras61]

5. Try adding the final / manually

That made it work for me when I did it (looks like a typo in the original message).

http://www.msnbc.msn.com/id/4724213/

[benburch]

2. I was saying this a year ago.

And, of course, was told that I am "crazy." :(

[robcon]

26. People have been saying it since the late 90's.

The "pop" hasn't happened yet, and I don't believe it will anytime soon.

[benburch]

37. I'll bet you a coffee.

What about it?

[webtrainer]

3. Home Prices in L.A. Soar at Record Rate

The median leaps 29% to $375,000 in March as buyers scurry to act before interest rates rise.

http://www.latimes.com/business/la-fi-homes13apr13,1,939528,print.story?coll=la-home-headlines

----

I think the really smart people in this area are selling now, keeping the cash close at hand, then will buy after prices drop 20% or more after the bubble pops.

Greenspun and others do seem to be propping up the economy just enough, but there are serious strains that really will make the downside worse after we elect Kerry.

[David Zephyr]

31. I'm Not So Sure There Is A Bubble in California Real Estate. Here's Why:

Real estate, especially residential property, was falsely deflated far below its actual value during the 1990's in California. This was a new phenomena for Californians---their homes were not appreciating year after year as they had for decades without interruption.

While home ownership in the mid-west and south has always been the best investment an individual could make due to the attractive tax deductions permitted, buyers there have never historically seen the dependable appreciation that Californians have on their properties. So, the equity that they built was essentially only what they'd paid against their mortgage with very little equity growth at the top from appreciation. This has almost historically been the opposite in California.

Why? As always, supply and demand.

First, in the mid-west and the south, the supply of available land for new home construction is still ample compared to the limited space, if any, that is left in California. Even in those two famously sprawling metro areas of Houston and Oklahoma City, there is still more land for developers to drop "planned communities" on to. And as far as Houstonians may think that Stepford Sugar Land is from the former Enron building downtown, that distance pales to the ones that commuters have considered status quo for thirty years in greater Los Angeles, the Silicon Valley and San Francisco.

A home purchased in Houston for $70,000.00 in the late 1970's is still worth only $130,000.00 today. That's $60,000.00 appreciation in thirty years! Homes appreciate that much in one year in Los Angeles now. And that is not only because of the limited supply of housing here, but also because of demand.

Leaving aside the regional advantages of climate, culture and natural beauty of the Golden State and its historic population growth, there's still a new component now further driving up real estate VALUES which is reflected in the rising prices: California is the America's threshold of the economically dynamic Pacific Rim. As wealth is transferred to Asia and Indonesia, those who are benefiting the most from that fortune there are choosing to have homes here in California. Ask anyone who lives here and they will confirm this. California has become a magnet for industrial magnates in Asia with regards to having second homes.

With regards to the rest of the U.S. and the recent rise in the pricing, not value, of residential real estate (with the exception of the Coastal States and Chicago on Lake Michigan), this is mostly attributable to the fact that people detoured their extra funds from 401K's into property. Real estate was "real" and felt safer than stocks. And here, speaking of the mid-west and the south, I do believe that there is real bubble developing and I agree with the author of this article. I would be very wary of investing money in real estate in these regions anymore. The prices are not supported by value.

And yet, to those who can afford to muster some money and still invest in real estate in California, especially the coastal communities, I'd caution you consider the consequences of being left behind altogether here, where the demand still far out-paces the supply.

[Emillereid]

41. So you don't think I should sell my house in CA --

I live in a small community (Oak Park) in Ventura County (about .5 hour drive to Malibu). I am going nuts trying to figure out whether I should bail out or hold tight with our house. It's gone up incredibly since we bought it in 1993. It's real claim to fame is its own school district where all the schools have won either a National Blue ribbon award or CA distinguished award. The High School was judged among the 100 best in America. Lots of AP classes and high scores, etc. But there is so much noise about the bubble bursting -- I feel like maybe we should take our equity and run. Keep hearing that old adage: Bulls and bears make money -- pigs don't.

[David Zephyr]

44. Depends on Your Short Vs. Long Term Plans.

If you are truly of thinking to "take the equity and run" then, perhaps you should do so, but I'd ask you this: where would you run to? Anything in Southern California, where it appears you are happy living, will be in the same situation. You gotta go somewhere with the money, Emillereid.

But if you are thinking of retiring in Southern California, then I'd stay put, because once you leave you are out of the game, so to speak. Ask anyone who is even considering moving here from back east. It's no longer sticker shock, it's sticker trauma.

You live near Malibu so you have the Pacific fresh air, you have the year-round Mediterranean climate and all of the cultural titillation one could wish for. If I were you, I'd stay put...but that's me.

Keep me posted. Are you going to be going to the hoe-down at Doug's in June?

--DZ

[Emillereid]

51. Recently we refinanced with a five year fixed --

because our plan was to leave Oak Park as soon as our youngest finishes high school. She will graduate in 2007 . In our view the only great thing about Oak Park is the school system -- otherwise it's 30 miles from my husband's job in west Hollywood, is at least an 1.5 hours from any 'cultural titillation' with the LA freeway system. It's the ultimate suburb -- there's no business to speak of and it's boring, boring, boring. I consider it an intellectual waste land. Our plans were to move out of state -- maybe Maryland because I have family there. Alternatively we're thinking that if Bushit is re-installed next November we'll leave the country altogether.

Yes I plan to come to Doug's in June. You too?

[David Zephyr]

53. Look Forward to Seeing You At Doug's.

I just had to use that word "titillation" in honor of John Ashcroft's testimony today. Ha!

[BostonTeaParty04]

34. I think the home buying surge is REFINANCING to pay off debt....

People are giving away their houses/equity just to get by. There won't be anymore equity to sell back to the bank eventually. And that's when everything will go POP!

[Cronus Protagonist]

43. Then it will happen quite soon

Everyone's been remortgaging obver the last ten years here in LA. Everyone I know has done it and taken the equity to pay off credit card debt and then run the cards up again.

[David Zephyr]

52. Yes! And The Banks Are Like Sharks, Aren't They?

It's the same scheme that allowed the Banks to steal the farms in Oklahomna.

People, BostonTeaParty04 has this right, don't give away your equity.

[eyesroll]

4. This makes me glad I live in older housing in a non-trendy area

Our housing stock doesn't appreciate as quickly as newer or trendier properties do, but it's also insulated (to an extent) from bubbles bursting. It never got out of control, so it doesn't have much sinking to do.

[Mountainman]

6. When Kerry is elected he should fire Greenspan

Greenspan is working for BushCo. He is no longer an independent voice. He has gone over to the dark side, he needs to go.

[bearfan454]

10. You got that right Mountainman.

All of these crooks need to go.

[54anickel]

7. Add to this the problems at the GSEs (Fanny and Freddie) and their

derivative markets. A pop will hit much more than just housing. Japan's banking also took a huge hit when their bubble burst, and their savings rates were high versus our "negative saving".

Watch for the volcanic eruption of feces to hit the fan.

[bahrbearian]

9. I'm waiting to see what Frodo says'

you guys are so negative. sarcasm on

[54anickel]

36. Heh-heh! Hang out in the SMW thread much?

[bahrbearian]

38. I don't know if you call it hanging out, more like lurking, you guys

are way ahead of me on that stuff.

[JNelson6563]

45. heh heh my thought too

The marketeers always give themselves away. haha

Crazy day on the Street today eh? I missed the entire thing and was shocked at final #s! Zowie! And with the usurper speaking tonight it could be crappy again tomorrow. He hardly inspires confidence...

Julie

[54anickel]

59. Hey Julie!

Great to see ya, where ya been? Miss you in the SMW, hope you can come back soon.
The usurper - :puke: had to turn it off, couldn't stomach watching anymore. Thought I'd participate in the thread on his little conference, couldn't stomach that either!
Yes, I'm sure he'll inspire a huge rally in the market tomorrow - NOT!

[hang a left]

11. What is your take on what will happen after everyone that could

has refied and refied over the last few years and sucked all the equity out and home prices plummet.


Could there ever be a debtors prison?

[havocmom]

13. Debtors' prison... BINGO!

Prison labor is cheap, saves all the trouble of sending stuff overseas and management having to learn a new language or trusting (and paying) interpretors. Plus, companies using prison labor can loudly proclaim "Made in the USA!"

As I recall, the more of more companies toward prison labor came right after the drug laws were changes and a lot of non violent young people started getting sent to jail in the 80s. Hmmmmm, and the same people were running things then too.... oh, pardon me, just thinking out loud.

edit: typos

[Fovea]

25. Read 'The Celling of America'

for more on this topic.

[ozone_man]

15. It's the debt bubble.

First the stock market bubble collapses, now the real estate bubble is collapsing, then the debt bubble will finish the economy for sure.

http://tinyurl.com/22byp

[hang a left]

16. Then what?

[ozone_man]

20. I don't know,

but some see a depression coming. I would say at the very least a much deeper recession than we have felt up to this point. We've been living on refinance money and deficit spending.

[54anickel]

23. We may end up bailing out a few of the bigger banks, may also have

a domino effect on some of the smaller banks. Greenspin and Snow keep stressing that Fanny and Freddie are not gov't back and there is nothing as too large to fail. Bad thing is that many of the larger banks hold a lot of Fanny and Freddie bundled equities and derivatives and the banks ARE gov't back (FDIC).

They'll probably just make lots of big helicopter drops of money, but what will that do for the US Dollar? They are already stating the USD is too high based on the amount they've been dropping.

Will we need wheel barrows to carry the amount of USD needed to buy a loaf of bread? :shrug:

But I'm a doom & gloomer, along with the author of the article. Pay no heed to the man behind the curtain.

[JNelson6563]

46. yep, that's what I was thinking

Consumer debt is at an all time-high, bankruptcies galore, millions in credit counseling and foreclosers becoming more common.

We are drowning ourselves in a sea of debt. The nation falls victim to the siren song of endless consumerism. Ugh.

Julie

[Ernesto]

8. Just this AM

Local NPR station reports that the average Sacramento home value is $400,000. And Sac has a "cheap housing" reputation!

[shanti]

22. i know what you're talking about, ernesto

as i live here too. :hi: my home is just a halfplex (LOTS of them here, as you know). i bought it for 67,000 8 years ago and similar units are selling for 180-200,000 now. these are only 2 bedrooms! i'm in the middle of a cash out re-fi (maybe sign this friday) so i can remodel. not taking too much out tho, so i should be ok.

sacramento USED to be low-cost housing until the bay area folks started migrating in droves. can't call it that now:-(

[treepig]

12. what a joker

get the whole deck: http://www.wallstreetmostwanted.com/page3.html

[progressivebydesign]

14. I don't believe it. Why are we listening to one guy's opinion?

I don't understand why people glomm onto things so easily. The housing market is not going to "pop". It has been going up and down steadily for the past few years. The only hot areas are the typically hot areas... California, East Coast, etc. There is less available housing, as people are staying put, and desirable areas are getting maxed out.. that's why you see ridiculous home prices in some areas, and still-reasonable housing in others.

We have a lot of other things to worry about than this.

[54anickel]

18. You're right! What on earth was I thinking. Taking one guy's opinion

as gospel. It's so limited to only certain areas of the market. I'll go and take my happy pill now and take a nap.

http://news.google.com/news?hl=en&edition=us&q=housing+market+bubble

[54anickel]

33. One of the more interesting articles out the plethora that comes up

with that search -

http://www.inman.com/inmannews.aspx?ID=40822

Real estate bubble babble revisited
Guest perspective: Debt addiction fuels 'fabricated' property valuations

Editor's note: The Center for Economic and Policy Research in Washington, D.C., held an essay contest to find out whether anyone could challenge the center's housing bubble theory. The winner was Hilary Croke, a Federal Reserve Board employee, whose four-page essay argued against a collapse in house prices. This story is a response to Croke's essay.

Is all this bubble babble just gibber jabber? Does it go beyond a Dr. Seuss story or Chicken Little saying, “The sky is falling, the sky is falling?” Those who dismiss the bubble argument as a modern day fairy tale with limited risks to the American dream have grown carelessly unrealistic in their assessment of what is strikingly evident.

So, what is strikingly evident?

more...

[sendero]

24. glomm...

.... glomming onto gloom is not new. And most of the time it is a mistake.

But this time, I'm firmly in the gloom category.

I have a feeling this guy has factored out the simple variables like location. Inflation in home prices is not new, and I've seen it before and it always ends badly. Every commodity has an intrinsic value, when speculation and tulip-bulb fever push prices well beyond that value, a crash will inevitably occur.

Now, we have weathered such crashes before (late 80s' in many areas of the country), but this time there is a difference. Because of the fed's loose money policies, there are already way too many homes out there that have almost no equity. When a little deflation is combined with excessive debt, look out below.

[PfcHammer]

17. just figured it out. debtors will be sent to fight in iraq after nov n/t

[Lorien]

19. I get a blank page

anyone care to copy and past a few paragraphs?

[Qutzupalotl]

21. Why Housing Is About to Go "Pop!"

Too many red alerts are flashing for investors and the Fed to remain in denial when so much is at stake. If this bubble bursts, watch out

By Mark Weisbrot
Updated: 8:00 p.m. ET April 12, 2004

If you still need proof that a bubble is building in the housing market take a look at the findings of my economist colleague Dean Baker at the Center for Economic Policy & Research in Washington, D.C. He has tracked national housing prices going back to 1951. Prices pretty much track the rate of inflation up until 1995. But since then, average prices on new and existing homes have soared more than 35 percentage points beyond the overall rate of inflation. Is that unusual? You bet it is.

(snip)

Over the last year, housing prices increased by 8%, while rental prices rose by only about 2%. In some of the bubble areas, such as Seattle and San Francisco, rents are actually falling. And rental vacancy rates are at a record high nationally. These are indications that the bubble's end is near.

INDIFFERENT FED. A rise in long-term interest rates, which would push up mortgage rates, could collapse the housing bubble faster than anything else. Even after the recent jump in interest rates -- from 3.65% to 4.20% on the 10-year Treasury note -- long-term rates are still very low by historical standards. But inflation has been rising: The consumer price index is now running at a 3.7% compound annual rate over the past three months, as compared to 1.7% over the last year.

And the dollar's decline portends more inflation in the near future, especially as the greenback remains historically quite overvalued (another bubble) -- as witness the U.S. current-account deficit, which stands at more than 5% of gross domestic product.

The Federal Reserve Board has been uncharacteristically indifferent to the prospects of increasing inflation. It has not only kept short-term rates at a 46-year low of 1% but in its last statement, the Fed's rate-setting committee said the risk of "an unwelcome fall in inflation" now "appears almost equal to that of a rise in inflation." Chairman Alan Greenspan has also denied the existence of the housing bubble. It's hard to imagine that he really believes either of those two things.

(more at link--try IE vs. Netscape--thanks Microsoft)
http://www.msnbc.msn.com/id/4724213/

[reprobate]

27. Now we know why the rise in employment. From the same article

"The government's latest household survey of employment report last week showed that people over 55 accounted for an incredible 103% of jobs gained over the last year. Many have no choice: They can no longer afford to retire as planned."

[wetbandit2003]

28. Debt Bubble???

My philosophy,
People choose to buy on credit, Get loans and live well beyond their means. People choose to buy a Posh home with hipped roofs in an upscaley neighborbood, drive that new Avalanche and or Mercedes SLK and run up their credit card's $5,000 limit. Hey, If they loose their job and end up in a foreclosure, a collections agent bothering them and a tow truck taking away that Avalanche and Mercedes back to the dealer, thats their own fault. Consumers themselves create a debt bubble, not the Federal Reserve.

[IrateCitizen]

35. Your philosophy is oversimplistic

My wife and I live in Westchester Co., NY. For people that work in NYC and want to have some kind of quality of life for their family, there are few nicer areas in the NYC metro area. However, there are several problems that have resulted from this.

I work as a civil engineer. If I want to have fairly steady work and the ability to work on some rather dynamic projects, I have to live near a major city. That's why my wife and I live in Westchester right now.

In our county, school districts are a HUGE consideration. There is TREMENDOUS disparity between a "top-flight" school district like Chappaqua or Scarsdale, and the "also-rans" like Yonkers and Ossining. For this reason, parents do what they can to buy homes in the nicer districts.

The problem is that the basic home price -- I'm talking a 3 BR, 1 BA split on a postage-stamp lot -- costs you an arm and a leg. In my town, which is on the higher end of school districts, you can hardly find anything for less than $400K. Note, I'm not talking luxury homes -- I'm talking basic splits and ranches built in the 1960's and 1970's, within town limits.

Personally, my wife and I don't want to live chained to a mortgage like this, so I'm getting my teaching certificate and we're moving upstate. But that doesn't lessen the burden for those who choose to remain in the area. If an upper-middle-class family like us can't afford to live there, then how do those who don't have our means (yet work in the town or area) afford to do so?

I used to think the analysis was pretty much what you present. But having lived through it, I'm no longer so sure.

[54anickel]

40. You make an excellent point. There's a book that came out not too

long ago that touches on just this subject, can't think of the women who wrote or the name. But yes, she also made the point that even though wages have increased, discretionary spending is down from the old Leave it to Beaver days.
Maybe someone else will know what book I'm thinking of. Something "like 2 income trap"?

[IrateCitizen]

42. The book is "The Two Income Trap" by Elizabeth Warren

She was on NOW with Bill Moyers about a month ago, and she said that she thought that people were spending more on discretionary purchases when she started her research, but the reality turned out to be exactly the opposite. People are spending LESS on discretionary goods than 40 years ago -- but they are spending a significant amount of their income on housing and transportation, much MORE than families spent 40 years ago.

[54anickel]

47. Ah, thank you. At least I did have the title correct. Another senior

moment. I've not read it yet, heard her on NPR when it was first being released.

[sendero]

57. People buying those houses....

... need to be able to afford them. That means they need to have enough money to put a minimum of 5% down, plus closing costs, and have 2-3 months living expenses left over in available cash.

For those already living there, the fact that the houses have gone up in price (as long as they stary there) is very good news. Especially if they are smart enough to sit on the paper "equity" rather than borrow against it and re-mortgage their future.

My point is simply that the fact housing in some areas, no matter how modest, is beyond the means of most and that is not an excuse for them to take on debt that they will only be able to pay if everything goes right. It rarely does.

[hang a left]

29. Where might they be finding work?

[BiggJawn]

30. "Lost another HOME to Di-Tech-dot-Com!"

What, I wonder, will happen to people who took on a second, third, fourth mortgage at oh, say an inflated valuation of $300,000 on a home that will have a market value of less than 100 kilobucks, post bust?

BiggJawn knows ALL about being "top heavy" in Real Estate...You lose your ass and parts of your back and nut-sack...Hello Foreclosure!

And here's another Andy Rooney Question....
What about the latest thing in Revenue Enhancement for the states and municipalities? all this property tax "reform" that's been going on? here in Indiana, they "updated" the procedure wherein they assessed your house based on the price of a 2X4 board in 1936 to a "market-value" system. A LOT of people I know saw their taxes double and triple. Now, after the bust, since re-assessments are supposed to be done every 10 years, there are gonna be a lot of people paying taxes on Thin Air. Example: Pre-"update", say my home assessed at $25,000 in a market where it could have sold (at the peak) for maybe $150,000. The new assessment was for $135,000, and I'm taxed accordingly. After the bust, my home has a market value of maybe $50,000, but I'm being taxed at a value of $135,000...

Of COURSE I'm gonna protest the assessment! So, they agree (not fucking likely in this area) and my assessment is reduced to $45,000. Never mind the stress and lost time getting things fixed, what about the tax coffers? what about all those new school books and fire trucks and cops they were gonna get?

Fahgeddaboutit! Only question remaining is: Do we burn Greenscum at the stake?

[David Zephyr]

56. "Lost another HOME to Di-Tech-dot-Com" ! Ain't That The Truth.

These people are vultures and it is shameless.

Your line did have me laughing, though! :hi:

[David Zephyr]

32. I'm Not So Sure There Is A Bubble in California Real Estate. Here's Why:

(I posted this accidentally above by mistake. Please forgive. I intended to post it here... below the author of the thread's post.)

Real estate, especially residential property, was falsely deflated far below its actual value during the 1990's in California. This was a new phenomena for Californians---their homes were not appreciating year after year as they had for decades without interruption.

While home ownership in the mid-west and south has always been the best investment an individual could make due to the attractive tax deductions permitted, buyers there have never historically seen the dependable appreciation that Californians have on their properties. So, the equity that they built was essentially only what they'd paid against their mortgage with very little equity growth at the top from appreciation. This has almost historically been the opposite in California.

Why? As always, supply and demand.

First, in the mid-west and the south, the supply of available land for new home construction is still ample compared to the limited space, if any, that is left in California. Even in those two famously sprawling metro areas of Houston and Oklahoma City, there is still more land for developers to drop "planned communities" on to. And as far as Houstonians may think that Stepford Sugar Land is from the former Enron building downtown, that distance pales to the ones that commuters have considered status quo for thirty years in greater Los Angeles, the Silicon Valley and San Francisco.

A home purchased in Houston for $70,000.00 in the late 1970's is still worth only $130,000.00 today. That's $60,000.00 appreciation in thirty years! Homes appreciate that much in one year in Los Angeles now. And that is not only because of the limited supply of housing here, but also because of demand.

Leaving aside the regional advantages of climate, culture and natural beauty of the Golden State and its historic population growth, there's still a new component now further driving up real estate VALUES which is reflected in the rising prices: California is the America's threshold of the economically dynamic Pacific Rim. As wealth is transferred to Asia and Indonesia, those who are benefiting the most from that fortune there are choosing to have homes here in California. Ask anyone who lives here and they will confirm this. California has become a magnet for industrial magnates in Asia with regards to having second homes.

With regards to the rest of the U.S. and the recent rise in the pricing, not value, of residential real estate (with the exception of the Coastal States and Chicago on Lake Michigan), this is mostly attributable to the fact that people detoured their extra funds from 401K's into property. Real estate was "real" and felt safer than stocks. And here, speaking of the mid-west and the south, I do believe that there is real bubble developing and I agree with the author of this article. I would be very wary of investing money in real estate in these regions anymore. The prices are not supported by value.

And yet, to those who can afford to muster some money and still invest in real estate in California, especially the coastal communities, I'd caution you consider the consequences of being left behind altogether here, where the demand still far out-paces the supply.

[midnight armadillo]

39. Same in MA

While prices are generally inflated, there is beginning to be a shortage of buildable land in eastern MA, which inflates prices tremendously due to high actual demand. Even if there is a nationwide housing bubble burst (that's weird grammar) it's not likely to do much here due to the huge demand.

What is really needed is saner development rules, instead of 5,000 sq ft McMansions slapped up on min 1 acre plots. Sprawl inflates housing prices, increases cost of living, and decreases quality of like. In MA we have 'home rule' where cities & towns don't cooperate for development, so each one attempts to minimize stresses on school systems and budgets by requiring big lots. A vicious cycle indeed.

[David Zephyr]

50. I Would Say That Massachusetts Is Nearly Bullet Proof

Midnight Armadillo, if I had some free capital right now, I'd like to either buy a small farm in Western Mass or a small place on the Cape. I really can't see any downside in real estate there...at least at this point. I think the upside potential is still great.

I have family in the mid-west, the south and in Texas. Their homes are all finally beginning to experience some real growth in appreciation, but I think it's this is short-lived and history in on my side of the argument. The lure is for these people to go out and re-finance sucking their years of equity accrued from faithful monthly mortgage payments, extending the term of the loan and...essentially re-purchasing their existing homes for a higher and, inflated price. I really don't think this is wise.

I believe there is a "bubble" that is developing in those parts of the country.

I told one of my nephews to move to California and to buy anything at all, hang onto it for five years, make the payment if it meant starving, and then cash out. He could then move back home taking the profit all with him and purchase a home there by writing a check for it all. I told him he'd make more money on his home than he would at his job. But...they were afraid to do it. That was three years ago. He should have taken my advice.

Most all of the old-timers here at the DU know I am a socialist, but when in Rome, you what the Romans do. I live in a capitalistic society where my health care is not provided, where the roof over my head is not provided, where my retirement will not really be provided. It is essential for everyone here reading this to understand that it is important to make money, to have your money grow in order to provide for your family's future. There's nothing compromising about that at all. Take it from this life long socialist from the petit bourgeoisie.

[Chico Man]

54. Hopefully RI is bullet-proof as well

My father bought a house in Randolph, MA, in 1977, for 30K, sold it in 1986 for 175K, bought a house in North Easton for 275, and is hoping to sell in the next year for 500K. Not bad. Only thing is that he is going to have to get a new septic before he sells. Still a handy profit none-the-less.

As far as my house in RI, the RI housing market is booming. There is a shortage of houses in the "nicer" towns in the state, and there is not much building going on. Sprawl is kept to a mimumum, and the quality of life is just great. I think we are quite safe here.

Check this out:

http://www.projo.com/realestate/content/projo_20040406_rihouse.2013bd.html

Rhode Island Housing raised the purchase price limits for its low-interest loans for first-time homebuyers to a record $330,000 last month, jumping an astounding $120,000. The more than 50 percent hike nearly doubled the number of homes that qualify for financing.

"It's just a reflection of what's happening in Rhode Island's real estate market," Rhode Island Housing communication director Chris Barnett says. "Anyone who reads the classified knows that every month the prices inch up a little higher."

The limits were last changed about a year ago.

"Because of changes in federal guidelines that govern our loan program, we were able to adjust our limits more realistically," Barnett says.

Rhode Island Housing, just like housing financing programs in other states, uses a formula supplied by the federal government to determine their loan limits, based on Mortgage Revenue Bonds. Until recently, that formula had not been updated since 1994.

[David Zephyr]

55. Bullet-Proof Column.

Now those homes in Newport....

[Name removed]

48. Deleted message

Message removed by moderator. Click here to review the message board rules.

[VolcanoJen]

49. Any DU Realtors/Mortgage Brokers around?

After reading this article, and the terrifying Sunday NYTimes article about new-construction foreclosures in the Poconos, I'm really starting to get cold feet about purchasing a home.

I'd love, and appreciate, some honest feelings for the market from good-hearted DU Realtors and Mortgage Brokers!

[JanMichael]

58. Economist Magazine NAILED this issue last year.

http://www.economist.com/surveys/displaystory.cfm?story_id=1794873