Friday, June 16, 2006

Biggest Housing Boom In Over 100 Years

From Marketwatch:

U.S. housing boom is biggest since 1890

The recent housing boom is the biggest the United States has ever seen, but its underlying reasons may have been psychological, economist Robert J. Shiller said on Friday. New data also suggest the market might be at the end of a cycle, he added.

The only time since 1890 that compares to the recent residential real estate market is just after World War II, the Yale University professor said during a presentation on U.S. home prices, held at Standard & Poor's in New York and broadcast to journalists on the Web.

"After World War II, the soldiers came back and they wanted houses and started the baby boom. And when you had babies, you wanted houses with at least two bedrooms -- and that wasn't so common back then. They went on a buying spree and it pushed home prices up," he said.

The recent boom, however, doesn't have the same fundamental variables causing prices to soar, he said, adding that variation in such things as building costs, population and interest rates doesn't adequately explain the reason for the housing boom.
"I don't see why home prices should be shooting up that strongly," Shiller said, adding that speculation may have played a role. "It's a sign of concern."
During a question-and-answer session, he said that the stabilization of home prices could also have some effect on consumers' means of gaining equity. Low interest rates inspired people to refinance their homes, and the increasing value of their houses allowed them to pad their pockets with spending money; consumers will now have to turn to other means for financing, including credit, he said.


Anonymous Anonymous said...

I read the article. However Schiller didn't define why this time is the biggest in over 100 years???

6/16/2006 02:12:00 PM  
Blogger grim said...

Shiller has been hyping his deal with the CBOE a little too often. It seems that Shiller has been trying to get a plug in, whenever possible.


6/16/2006 02:15:00 PM  
Anonymous Anonymous said...

Gotta get out there and peddle his product, huh? Nobody nibbling?

I'm yelling risk.. RISK! Buy housing futures. Short your house now!

I love our country.


6/16/2006 02:16:00 PM  
Blogger InvestorDavid said...

I used to love this country until Bush came into office.

The country should be divided into two countries.

West Coast, North East + Chicago,


The Red Neck Country. :)

I am seriously considering retiring in Australia or New Zealand.

6/16/2006 03:27:00 PM  
Blogger Felix_phl said...

Shiller's index is indifferent to whether you go long or short, so he is theoretically indifferent to whether the boom busts. You could just as easily go long w/ the CME and CBOE futures and options. All Shiller is providing is the index.

6/16/2006 04:55:00 PM  
Anonymous Anonymous said...

I totally agree with you investor david. How do we make dividing the country a reality?

6/16/2006 05:08:00 PM  
Anonymous Anonymous said...

Long or short, one more step into making a house something other than an abode.

Geez. Maybe he can develop an index for stupidity and we can short our kids' teachers so that if they fail, we win.


6/16/2006 06:11:00 PM  
Anonymous Anonymous said...

David, I used to love this country before it was overtaken with socialist scum and limousine liberals like the ones who rule NJ.

6/16/2006 08:47:00 PM  
Anonymous Anonymous said...

Fox 10 PM news just had a bit on how to buy a 2nd home with no $$ down. Are they that stupid?

6/16/2006 09:41:00 PM  
Anonymous Anonymous said...

It`s not a buyers market in New Jersey until we see 30% price reduction in home for sale inventory of Homes for Sale in New Jersey is rising !!!

Don`t be fooled by Homebuilders incentives unless they start reducing New Home Constructions starting Price !!!

6/17/2006 12:31:00 AM  
Blogger new 200 Mbps BROADBAND over POWER LINES said...

Can you call this a "Fire Sale" in Ocean and Monmouth Counties- New Jersey Real Estate scandal ?!!!!!

"Offers to purchase properties owned by beleaguered real estate mogul Solomon Dwek have so far reached $109.1 million- amount comes to about one-third of the $321 million in claims lodged against Dwek's 350-parcel empire"

Offers on Dwek property top $109M

Amount is a third of claims against empire
Posted by the Asbury Park Press on 06/15/06
FREEHOLD — Offers to purchase properties owned by beleaguered real estate mogul Solomon Dwek have so far reached $109.1 million, the Superior Court's fiscal agent said Wednesday.

The amount comes to about one-third of the $321 million in claims lodged against Dwek's 350-parcel empire. The claims came in a legal and financial scramble after Dwek, 33, of Ocean Township was accused by PNC Bank of bouncing a $25 million check in April.

The highest price offered so far is $6.5 million for a commercial property off Monmouth Road, West Long Branch. That property is owned by Dwek's company, WLB Center LLC, which paid $5.25 million for the 13.7-acre tract in May 2005.

Donald M. Lomurro, the court-appointed fiscal agent reviewing Dwek's assets, predicted that bids on the properties will lead to "bigger and better numbers." He said the offers so far are considered valid because they equal or exceed the amount Dwek paid for the properties.

Beyond the lawsuit, Dwek has been charged by the FBI with criminal bank fraud. He is free on $10 million bond.

Superior Court Judge Alexander D. Lehrer froze Dwek's assets last month and has said he intends to see if selling many of the properties can satisfy all of the claims.

Lomurro said investors in Pennsylvania, Ohio, Connecticut and elsewhere continue to inquire about the properties. Many of Dwek's properties are held by limited liability companies that have other owners, who can buy out Dwek's interest in the firms.

Nearly half of the money is offered by Deal Property Acquisitions LLC, which proposed spending $45.6 million dollars to buy just 13 of the properties. Those properties include commercial properties in Dover Township, Red Bank, Ocean Township, North Carolina and Pennsylvania.

Nothing could be learned about the identity of that company Wednesday.

6/17/2006 12:34:00 AM  
Anonymous UnRealtor said...

"I used to love this country until Bush came into office. The country should be divided into two countries."

David, I'm saddened to see someone as intelligent as you make such stupid statements.

6/17/2006 10:39:00 PM  

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