| Low interest rates and relatively easy access | | | | appreciated approximately 30% over the past |
| to mortgage money are just two factors that | | | | three years. |
| have caused a boom in residential real estate | | | | |
| prices over the past few years. This | | | | Santa Ana - What has continued to be a red |
| phenomena has caused a number of analysts to | | | | hot market now has a "greater than 50% chance |
| ask whether a national "housing bubble" now | | | | of experiencing price declines," according to |
| exists and how its potential collapse could | | | | the PMI U.S. Market Risk Index. The reported |
| effect the economy. This is a complicated | | | | median house price is $710,000 with an |
| subject that is influenced by both national | | | | appreciation factor over the past year of |
| and regional issues. | | | | 10.4%. |
| | | | |
| Over the next several columns, we'll look at | | | | San Francisco - The National City Corp study |
| many of these issues and see if we can weave | | | | found that San Francisco was 30% overvalued. |
| our way though the maze of possibilities that | | | | National real estate firm Caldwell Banker |
| could impact the outcome of this concern. | | | | recently estimated that a 2,200 square foot |
| | | | house with 4 bedrooms, 2½ bathrooms, a |
| Let's begin with a regional overview and | | | | family room and a two car garage in a |
| remember the words of Tip O'Neill, the | | | | "middle-management" neighborhood would sell |
| venerable Congressman from Massachusetts who | | | | for approximately $1,300,000. There are some |
| was fond of saying, "All politics are local." | | | | signs of the market cooling. In a 11/1/05 USA |
| The same principle could be said of housing, | | | | article, Judi Keenholtz, CEO of Empire Realty |
| at least according to a commonly used ratio | | | | reported that "desirable homes in good school |
| comparing mean house prices to mean family | | | | districts that used to fetch eight to ten |
| income on a local basis. | | | | bids now get three to four." |
| | | | |
| Using U.S. Census Bureau's numbers from 2003 | | | | Given the above examples, we can begin to see |
| and looking at various cities across the | | | | pricing differences of housing throughout the |
| country, we can immediately see how varied | | | | country and therefore how difficult it is to |
| pricing is throughout the United States when | | | | predict a national trend. |
| the ratio is applied. On the low end are | | | | |
| cities like Pittsburgh, Pennsylvania with a | | | | Of course a single ratio like "family income: |
| ratio of 1.47 and Corpus Christi, Texas with | | | | house price" is only one indicator and can't |
| a ratio of 1.58. On the other end of the | | | | provide conclusive proof of a trend one way |
| scale are Santa Ana, California and San | | | | or another. Other pieces must be brought into |
| Francisco coming in at 8.95 and 8.81 | | | | play if we can gain a true overview. |
| respectively. The average ratio for the | | | | |
| entire country is 3.59. | | | | In our next column we'll look at the ratio of |
| | | | "home price to rent" to get a different |
| Here are some excerpts from recent studies on | | | | perspective and try to answer whether fans of |
| these cities: | | | | the 49ers could retire with newfound wealth |
| | | | and happiness in the land of the Steelers. |
| Pittsburgh - On December 18, 2005, the | | | | |
| "Pittsburgh Tribune-Review" sited a study | | | | Stay Tuned. |
| that showed "housing prices in the Pittsburgh | | | | |
| region appear to be right where they should | | | | Glenn ("Chip") Dahlke, a senior contributor |
| be, and importantly, they are not overvalued | | | | to the Living Trust Network, has 28 years in |
| as are houses in some other areas of the | | | | the investment business. |
| country." According to the National | | | | |
| Association of Realtors, the Median Home | | | | He is a Registered Representative of Linsco |
| Price in the first quarter of 2005 was | | | | Private Ledger and a principal with Dahlke |
| $106,400. This was a 6.6% increase from the | | | | Financial Group. He is licensed to transact |
| first quarter of 2004 when the median price | | | | securities with persons who are residents of |
| was $99,800. | | | | the following states: CA. CT, FL, GA, IL. MA, |
| | | | MD. ME, MI. NC, NH, NJ, NY.OR, PA, RI, VA, |
| Corpus Christi - Third quarter 2005 results | | | | VT, WY. |
| from a Housing Market Analysis prepared by | | | | |
| National City Corp found that Corpus Christi | | | | If you have any questions or comments, Chip |
| was still -8% undervalued when compared with | | | | would love to hear from you. You may contact |
| other cities across the United States. The | | | | him at . You may also contact him at the |
| study done by the National Association of | | | | Living Trust Network. It's web site is |
| Realtors found "the local housing market is | | | | |
| in excellent shape with a potential for | | | | Copyright 2006. Living Trust Network, LLC. |
| significant equity gains." The median house | | | | All Rights Reserved. |
| price in the market is $123,000 and has | | | | |