do you think the Condo market in your area will go up or down?

[seeyouhere]

do you think the condo market in your area will go up or down in 2007?

and where do you live?


What about national mortgage/ interest rates.... do you think it will go up or down in 2007?

[Xelebes]

Going to go up. They can't build enough of them....

[ctman987]

Condo market in the Hartford area seems to be going up. Now I am not sure how the condo market in downtown Hartford itself will fare...only time will tell but in Greater Hartford it seems to be booming

[westsider]

Portland has peaked and I expect the next five years or so we will see a lot of conversions to apts.

[Jularc]

I think 2007 will be a strong year in NYC for Condo construction but then by 2008 it will start to fall down. Rental, Hotel and Commercial construction is defenetly on demand. So general construction in NYC will last alot longer.

[ChrisLA]

Prices have dropped slightly because of the slowing of sales, but overall I don't see condos losing their value anything soon in the Los Angeles area. Hey if they can still sell condos in my building at market values with so much financial and legal issues, I know the market is hold up well in the local area. Also I guess it helps that I live near the beach and in the downtown area of Long Beach.

[der Reisender]

i doubt that portland has peaked, the high end market may be tapped for now but the lower-cost condos like the Civic have barely begun, if the 1700 Building sells well it could keep the condo market churning locally

[pdxtex]

i doubt that portland has peaked, the high end market may be tapped for now but the lower-cost condos like the Civic have barely begun, if the 1700 Building sells well it could keep the condo market churning locally


^plus 1. have you seen the number of cranes going up in the pearl district and the south waterfront?. plus, there are a million infill lofts going up in se and way more condo conversions in older buildings then we can shake a very large stick at. people talk about this huge real estate bust but as far as urban construction in portland, id say things are still fairly robust.

[want2beaqui]

Well i know in Anaheim, They are bulding Aprox 9000 new residences (mostly condos) and around ornage county there are a re-diculous amount going up as we speak. The market is deflating here so im stoked about the surplus in condos so the market is gonna go down down down

[brickell]

The "market" is such a vague idea. Do you mean prices? Development? Sales?

For Miami, prices have cooled, but not dipped too much. We should see a steady rise as downtown becomes more livable.

Development? There's no where to go but up.

Sales? The flipper bust hasn't materialized yet, but inventory is growing. These are the times that try realtor's souls.

[big W]

Up, cant build them fast enough here in Edmonton.

[austin356]

In 2nd and 3rd tier American cities (ex. Atlanta, Charlotte) more supply of condos is actually building more long term demand. This is because the urban environment is exponentially better with every increase in the number of residents. This actually increases demand both nominally and relative to supply.

But this plays out only in the mid to long term. Short term is usually controlled by other factors, in particular, investors, which are backing out.


Mortgage rates are tied to the rate of the 10 year treasury, and that rate has come down about 75 basis points over the last several months. But, I think that rate is near a bottom, but I also think that the mortgage market has not fully fluctuated to the treasury market and the mortgage market itself come have some further rate cuts, except in the sub-prime market.

[Comrade]

Salt Lake City typically is a few years behind the national trend when it comes to growth. In the 1980s, when the economy in most major cities hurt, Salt Lake saw its biggest downtown boom, as it did in the early 90s and during the economic boom of the 90s, development was rather sparse. Now that the economy has tanked again, development is still thriving throughout the area and I expect the residential boom to continue with that trend, even though it's falling nation wide. So I say a few more years, then it'll probably decline as the national average of condo building goes up.

[Prahaboheme]

Orlando is red hot, in the midst of its biggest condo boom ever. No signs of slowing down right now.

[MapGoulet]

Condo prices are going down in most all markets. Year over year figures may be going up, but in a market that is changing direction, year intervals are a sample rate too long and therefore do not adequately represent the phenomenon at work.

Month over month is a more accurate sample rate provided the sample size is sufficient in each market. As month-to-month rates drop faster, year over year rates will accelerate downward. Although you will temporarily have yearly rates going up, then flattening in the short term, the YoY rates start to drop eventually as we're seeing in the national figures. The sample rate problem is not economic as much as its mathematics.

Oh, and for the condos under construction, developers tend to be optomistic and bullish even in the face of a downturn that may put their projects in the red.

[austin356]

Condo prices are going down in most all markets. Year over year figures may be going up, but in a market that is changing direction, year intervals are a sample rate too long and therefore do not adequately represent the phenomenon at work.

Month over month is a more accurate sample rate provided the sample size is sufficient in each market. As month-to-month rates drop faster, year over year rates will accelerate downward. Although you will temporarily have yearly rates going up, then flattening in the short term, the YoY rates start to drop eventually as we're seeing in the national figures. The sample rate problem is not economic as much as its mathematics.

Oh, and for the condos under construction, developers tend to be optomistic and bullish even in the face of a downturn that may put their projects in the red.


Very true, but this will start to diminish to a degree as the months go on, because we have just reached 1 year past the peak in 05. We can look for in the coming months for YoY to come down, yet if we see a stabilization (due to mortgage rate cuts, etc) in a few months, then the MoM could actually be much higher than the YoY.

[roner]

i doubt that portland has peaked, the high end market may be tapped for now but the lower-cost condos like the Civic have barely begun, if the 1700 Building sells well it could keep the condo market churning locally

I agree. Developers would be wise to include a majority of modestly priced condos oppose to the high end units. I think the market for lower end condos is massive.

[PuyoPiyo]

Here in Vancouver, WA and Portland, OR, I am PRETTY sure that the housing price will go down next year because NOBODY is buying any house. I have been looking for whole this year, and see the same property on the list still...

[der Reisender]

^40+ thousand people moved to Oregon last year, and i'd wager at least half moved to the Portland area, so i think SOMEBODY is buying. and the condo market seems to be on a different little bubble than the general housing one in the metro area

[westsider]

^plus 1. have you seen the number of cranes going up in the pearl district and the south waterfront?. plus, there are a million infill lofts going up in se and way more condo conversions in older buildings then we can shake a very large stick at. people talk about this huge real estate bust but as far as urban construction in portland, id say things are still fairly robust.

Most of the highrise const going on now was planned and started one or two years ago, a lot has changed in that time. Housing starts in general, including multi-fam, have slowed way down. Sales and appreciation are at 10 year lows, time on market and listings are at 10 year highs, all these indicators took a turn for the worse in the last year and these trends run 5-10 year cycles. Yes, there are cranes on the horizon, and there are buildings already planned that will start soon, but don't be suprised when there is only 1 or 2 cranes up in a couple years. Ask any realtor that was selling condos as fast as they could 2 years ago how many they are selling now.

[atlantaguy]

Single family constuction in the burbs has slowed some here and inventory is increasing, but the pace of construction and sales is still mind-boggling. Condo's, townhouses & lofts are still red-hot here, particularly inside the Perimeter. The very top end of the market seems pretty saturated though in all categories.

[DrJoe]

Toronto (GTA) is expected to sell 16,000 units this year, no signs of a slow down.

[Tombstoner]

Single family constuction in the burbs has slowed some here and inventory is increasing, but the pace of construction and sales is still mind-boggling. Condo's, townhouses & lofts are still red-hot here, particularly inside the Perimeter. The very top end of the market seems pretty saturated though in all categories.

Hmm...I think "red-hot" may be putting it a bit too strongly. Lots of developers are scaling back or postponing projects. A couple have been dropped entirely. It certainly has a pulse, but I think the condo market is going to continue cooling for the next 8-12 months.

[Kngkyle]

Slow down in south Florida. The hurricanes scared a lot of people away.

[The Chemist]

Nowhere but up. 2007 is set to be a fantastic year for condo development, even better than 2006.

[Attrill]

Chicago sales have gone from red-hot to stable, and will probably stay there for awhile. Development is continuing, but there is more growth in rental development since there is a shortage of rental units in the city (due in no small part to the condo boom).

[PuyoPiyo]

^40+ thousand people moved to Oregon last year, and i'd wager at least half moved to the Portland area, so i think SOMEBODY is buying. and the condo market seems to be on a different little bubble than the general housing one in the metro area

Who is buying? Those richy greedy people from California? lmao! (no offend to Californians)

[A&Fcolumbus]

Since Columbus is one of the few midwestern cities to have a huge economic growth in the late 1980's and all of the 1990's, yet still no major coastal-like housing bubble, there is hardly any burst being felt in Columbus.

Also, all of the residential population growth, to accompany the extreme economic growth, in Columbus during the 90's was not in downtown, therefore there has been a supressed market for downtown/urban condo housing for the past 30 years.

Developers did not start truely to play catch up with this pent up demand, for urban condos/housing, until 2000.

So Columbus' urban condo market is now one of the hottest markets in the metro, the pace of development in downtown is a little slower than 2003, but growth and prices are still increasing at a strong pace, and the many gentrified urban neighborhoods surrounding downtown cannot keep up with their demand for more owner-oriented housing.

Because of a increasing young professional market and a high demand from empty nesters, migrating from other sections of the metro, Columbus' urban condo market will continue to stay hot for atleast the coming years (despite the conditions of the national market.)

[brickell]

Can we give up this bubble talk? If not, point to a couple of markets that had went through a bubble. Comparing your market to fictional bubble markets on the coasts isn't going to be good for anybody.

[Latoso]

Chicago will be stable to up in 2007. But I predict we will see a shift in the types of units being built. Whereas luxury condos have been the norm in the current boom, I see a move to more affordable units in the pipeline in 2007 as well as an increase in the ultra high-end market. Plus we will also see an increase in much needed and highly in-demand apartment market.

[MidtownMile]

Hmm...I think "red-hot" may be putting it a bit too strongly. Lots of developers are scaling back or postponing projects. A couple have been dropped entirely. It certainly has a pulse, but I think the condo market is going to continue cooling for the next 8-12 months.

I think that depends on your perspective. Atlanta's condo market is still "red hot". However, you are right that some developers are postponing. The speed it was going at was insane for a density of its type. The Midtown Mile is going along quite well, but the foundation isn't quite done. I think a steady stream (so, semantics as to whether that is red hot or not) will continue into 08, and 09-12 will bring the insane development and influx of people.

[dfane]

Salt Lake City typically is a few years behind the national trend when it comes to growth. In the 1980s, when the economy in most major cities hurt, Salt Lake saw its biggest downtown boom, as it did in the early 90s and during the economic boom of the 90s, development was rather sparse. Now that the economy has tanked again, development is still thriving throughout the area and I expect the residential boom to continue with that trend, even though it's falling nation wide. So I say a few more years, then it'll probably decline as the national average of condo building goes up.


Economy has tanked?
where?
the housing market is always up and down and the problem is there are too many houses and condos being built at ridiculous prices that the market is getting over saturated. But the economy is the best its been in about 12 years or longer when you look at inflation, unemployment at around 4%.

[dfane]

Philly is definitely leveling off although they are still building alot of condos, but just cant see who is going to buy all of these condos?

So I think naturally it will dip back down and go back up like everything else.

[Taft]

Can we give up this bubble talk? If not, point to a couple of markets that had went through a bubble. Comparing your market to fictional bubble markets on the coasts isn't going to be good for anybody.

Seems you have a lot wrapped up in your perception of coastal living.

Anyway, spotting a bubble market (of any kind, but especially in real estate) is tricky. Think of the dot com bubble. Many said the industry was going too fast, but they were decried as naysayers. It was only after the bubble burst that people recognized it for what it was.

It will play out much the same way with housing, IMO. Those calling the building boom of the last few years a bubble will be written off until prices start falling. To be honest, I'm not convinced the bubble is a sure thing. But the market is certainly cooling, from what I've read, almost everywhere. Looking at the building activity and price increases of last few years, it is really hard to call the current market "red-hot". And I agree with the analysis that markets dominated by tourist dollars and non-permanent residents will be hit hardest if the bubble does burst.

Time will tell, no egos necessary.

Taft

[brickell]

No egos at all.

I was responding specifically to this:

Since Columbus is one of the few midwestern cities to have a huge economic growth in the late 1980's and all of the 1990's, yet still no major coastal-like housing bubble, there is hardly any burst being felt in Columbus.

There seems to be the perecption that the coastal cities have already burst, which just isn't the case. Sales are cooling and prices are dipping, but that hardley equates to a bubble bursting. As you say, time will tell, but let's not pretend someplace is better off because they haven't boomed the last few years.

[Taft]

Economy has tanked?
where?
the housing market is always up and down and the problem is there are too many houses and condos being built at ridiculous prices that the market is getting over saturated. But the economy is the best its been in about 12 years or longer when you look at inflation, unemployment at around 4%.

Err... While I agree that the economy hasn't tanked, the outlook isn't as rosy as you'd have us believe. This recent economist article covers both the economy and trends in housing construction. Enjoy.

Taft



Difference of opinion
Dec 13th 2006 | WASHINGTON, DC
From The Economist print edition


The economy, the Fed and the markets

THE outcome was never in doubt. On December 12th America's central bank kept short-term interest rates unchanged at 5.25%. What mattered was the statement accompanying the Federal Reserve's decision. Although Ben Bernanke and his colleagues gave a nod to the slowing economy (noting that the cooling of the housing market had been “substantial” and that recent economic indicators had been “mixed”), they repeated that they still considered inflation a bigger worry than weak growth.

That is not what Wall Street has been thinking. According to the latest Blue Chip monthly survey, four out of five financial forecasters reckon the central bank's next move will be to cut the federal funds rate. Some once-optimistic seers have been busy cutting their growth forecasts. The price of fed-funds futures suggests that financial markets see a 20% chance of lower interest rates by April. This had been close to 70%, but unexpectedly strong growth in jobs and then retail sales in November has caused some in the markets to think a rate cut less likely.

The central bankers are simultaneously more cautious and more optimistic than many on Wall Street. With core inflation still well above the 1-2% rate they unofficially deem appropriate, Mr Bernanke and his colleagues are genuinely worried about price pressure. Although fuel costs have fallen sharply, core consumer prices, which exclude the volatile categories of food and energy, still rose by 2.8% in the year to October. (November's figures will be released on December 15th.) The Fed's preferred price gauge, the core personal-consumption deflator, went up by 2.4% in the year to October, only a little short of the fastest pace for a decade. With inflation still too high, cautious central bankers see scant reason for abandoning their hawkish rhetoric.

Below-trend is your friend

By the same token, the officials are less concerned by the risk of a slowdown than their counterparts on Wall Street are. Not only do the central bankers expect the economy to grow below its trend rate in the short term; they want it to. That is because a period of below-trend growth will help dampen inflationary pressure by increasing the amount of slack in the economy. Fed officials worry that labour markets, in particular, are too tight. In their July forecast the central bankers expected an average unemployment rate of between 4.75% and 5% for the fourth quarter of 2006 and 2007, well above today's 4.5%. Modestly higher joblessness would be welcome. That unemployment has not risen suggests the economy has not slowed much below its trend rate of growth.

If prudence is telling the central bankers to stand pat, so is their optimism. The Fed is not among those who believe that America's unexpectedly deep housing bust will drag the rest of the economy down. In a recent speech Mr Bernanke made it clear that he saw little sign of the housing recession spreading elsewhere. A stream of weak statistics in subsequent days, particularly a report hinting that manufacturing was in recession, suggested that his optimism might be misplaced.

A more recent lot of numbers, however, pointed the other way. Although manufacturing may be in trouble, the services sector, which is much bigger, is still looking strong. November's employment report was unexpectedly rosy. Despite net job losses in construction and manufacturing, the overall number of jobs rose by 132,000 and total job growth for the previous two months was revised up, too. Far more industries were adding workers than losing them. The unemployment rate rose by a whisker, from 4.4% in October to 4.5%, but this was the result of an increase in the number of people looking for work, not a lack of jobs. America's labour-force participation rate rose to a near four-year high.

With the labour market so strong, and inflation still uncomfortably high, the central bankers were sensible to sound hawkish this week. But the gloomier views on Wall Street may yet be proved right. Cheery jobs figures today do not preclude trouble tomorrow, since firms do not shed workers the instant demand slows.

Construction is an extreme case in point, largely because it takes several months to build a house. Although employment in the building industry has fallen by over 20,000 in each of the past two months, the drops are modest compared with the collapse in construction spending. The fall in permits issued for new houses suggests there may be many more job losses ahead (see chart). Economists at Goldman Sachs expect housing-related employment to fall by 1.5m-2m in the next couple of years. Unless employment growth in the rest of the economy speeds up and absorbs some of the surplus, the overall jobless rate will soon rise, perhaps rather further than the central bankers would like.

http://matthewtrumbell.com/misc/CFN944.gif

[vanman]

Vancouver's condo market has already hit it's peak, although buildings (especially high rises) still sell out months in advance before construction ,all over the metro.

[Taft]

No egos at all.

I was responding specifically to this:

There seems to be the perecption that the coastal cities have already burst, which just isn't the case. Sales are cooling and prices are dipping, but that hardley equates to a bubble bursting. As you say, time will tell, but let's not pretend someplace is better off because they haven't boomed the last few years.

Fair enough. Though I don't agree with your last statement. Volatility in the market should be a very big consideration, IMO. A boom is certainly not problematic by definition. That said, the product of a boom must be sustainable long term, even in adverse market conditions. The bigger the boom, the bigger the worry that the market would be over saturated when things go downhill. This makes me largely agree with statements like the one you quoted: "Since Columbus is one of the few midwestern cities to have a huge economic growth in the late 1980's and all of the 1990's, yet still no major coastal-like housing bubble, there is hardly any burst being felt in Columbus."

At face value, a city like Columbus, where the boom was relatively small, has less exposure to the risk of a market downturn. Conversely, a city like Miami or even Chicago or New York has more exposure simply because of the greater magnitude of the boom.

This, of course, ignores the intricacies of the local markets. Things like stability of the workforce, diversity of the local economy, climate, "livability", etc. all contribute to this as well. But I think this is where some cities, Miami among them, start to look "bubblish." You shouldn't underestimate the effect of an established financial center on cities like New York and Chicago. Or the entertainment and commerce juggernauts on LA's economy. Cities with less well-established industries and workforces may suffer if real estate becomes unprofitable. Without an industry to attract a workforce and without a workforce to prop up a faltering real estate market, prices could deflate quickly causing speculators to pull out.

The good news, IMO, is that we are still in the land of "could's", "might's" and uncertainty. This analysis--though hardly unique and quite popularly thrown around the internet--will never come to pass if the market stays strong and the economy keeps on chugging. And we shouldn't underestimate the current appeal of the urban lifestyle.

As we've both said, only time will tell.

Taft

[brickell]

Well put and for the most part I agree. I think that the media has played a role in this, overhyping both the birth of the boom and it's death. People have read and heard bubble and burst so often that they assume the market has already gone to hell. As someone out there looking, I can say, that no, it hasn't. It's a buyers market, and inventory is up, but prices are steady and sellers aren't budging.

I know a few people here in Miami that sold a year ago and are still waiting for prices to "plunge" so they can buy again. I'm afraid they're going to be waiting a long time. Certainly the construction industry will take a hit as things slow down, but that's not the kind of bubble most people were led to expect.

[dfane]

Err... While I agree that the economy hasn't tanked, the outlook isn't as rosy as you'd have us believe. This recent economist article covers both the economy and trends in housing construction. Enjoy.

Taft



Difference of opinion
Dec 13th 2006 | WASHINGTON, DC
From The Economist print edition


The economy, the Fed and the markets

THE outcome was never in doubt. On December 12th America's central bank kept short-term interest rates unchanged at 5.25%. What mattered was the statement accompanying the Federal Reserve's decision. Although Ben Bernanke and his colleagues gave a nod to the slowing economy (noting that the cooling of the housing market had been “substantial” and that recent economic indicators had been “mixed”), they repeated that they still considered inflation a bigger worry than weak growth.

That is not what Wall Street has been thinking. According to the latest Blue Chip monthly survey, four out of five financial forecasters reckon the central bank's next move will be to cut the federal funds rate. Some once-optimistic seers have been busy cutting their growth forecasts. The price of fed-funds futures suggests that financial markets see a 20% chance of lower interest rates by April. This had been close to 70%, but unexpectedly strong growth in jobs and then retail sales in November has caused some in the markets to think a rate cut less likely.

The central bankers are simultaneously more cautious and more optimistic than many on Wall Street. With core inflation still well above the 1-2% rate they unofficially deem appropriate, Mr Bernanke and his colleagues are genuinely worried about price pressure. Although fuel costs have fallen sharply, core consumer prices, which exclude the volatile categories of food and energy, still rose by 2.8% in the year to October. (November's figures will be released on December 15th.) The Fed's preferred price gauge, the core personal-consumption deflator, went up by 2.4% in the year to October, only a little short of the fastest pace for a decade. With inflation still too high, cautious central bankers see scant reason for abandoning their hawkish rhetoric.

Below-trend is your friend

By the same token, the officials are less concerned by the risk of a slowdown than their counterparts on Wall Street are. Not only do the central bankers expect the economy to grow below its trend rate in the short term; they want it to. That is because a period of below-trend growth will help dampen inflationary pressure by increasing the amount of slack in the economy. Fed officials worry that labour markets, in particular, are too tight. In their July forecast the central bankers expected an average unemployment rate of between 4.75% and 5% for the fourth quarter of 2006 and 2007, well above today's 4.5%. Modestly higher joblessness would be welcome. That unemployment has not risen suggests the economy has not slowed much below its trend rate of growth.

If prudence is telling the central bankers to stand pat, so is their optimism. The Fed is not among those who believe that America's unexpectedly deep housing bust will drag the rest of the economy down. In a recent speech Mr Bernanke made it clear that he saw little sign of the housing recession spreading elsewhere. A stream of weak statistics in subsequent days, particularly a report hinting that manufacturing was in recession, suggested that his optimism might be misplaced.

A more recent lot of numbers, however, pointed the other way. Although manufacturing may be in trouble, the services sector, which is much bigger, is still looking strong. November's employment report was unexpectedly rosy. Despite net job losses in construction and manufacturing, the overall number of jobs rose by 132,000 and total job growth for the previous two months was revised up, too. Far more industries were adding workers than losing them. The unemployment rate rose by a whisker, from 4.4% in October to 4.5%, but this was the result of an increase in the number of people looking for work, not a lack of jobs. America's labour-force participation rate rose to a near four-year high.

With the labour market so strong, and inflation still uncomfortably high, the central bankers were sensible to sound hawkish this week. But the gloomier views on Wall Street may yet be proved right. Cheery jobs figures today do not preclude trouble tomorrow, since firms do not shed workers the instant demand slows.

Construction is an extreme case in point, largely because it takes several months to build a house. Although employment in the building industry has fallen by over 20,000 in each of the past two months, the drops are modest compared with the collapse in construction spending. The fall in permits issued for new houses suggests there may be many more job losses ahead (see chart). Economists at Goldman Sachs expect housing-related employment to fall by 1.5m-2m in the next couple of years. Unless employment growth in the rest of the economy speeds up and absorbs some of the surplus, the overall jobless rate will soon rise, perhaps rather further than the central bankers would like.

http://matthewtrumbell.com/misc/CFN944.gif

Its called controlled madness there is always going to be an evenflow with everything. The housing market was booming you cant expect it to stay that way, which obviously hurts the rest of the economy.
I personally believe these fed bankers are playing fantasy football with the economy.
Some things are soaring and will come down and some of it is intentianal like for the example the interest rate hikes, which help slow down the real estate boom.
Just like the stock market is higher then ever now and I suspect that will come back down to earth soon too.