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