A Blip In The Market Or The Bubble Is Bursting

Time to clear this bloggers monitor. The financial press is trying to catch up. "Sales of new U.S. homes increased a surprising 2.9% in December to a seasonally adjusted annual rate of 1.269 million, the Commerce Department reported Friday.Economists were expecting sales to fall slightly to a 1.23 million rate. The sales rate in November was revised lower to 1.233 million from 1.245 million previously." "The inventory of unsold homes increased 2.4% in December to a record 516,000. The median sales price fell 3.4% year-over-year to $221,800 in December. Sales of homes valued at $500,000 or more fell to the lowest level since June 2004." "For all of 2005, new home sales rose to a record 1.282 million. Annualized housing starts increased 5 percent to 2.12 million in November, with single-family starts increasing to 1.81 million." "While 2005 will go down as a big year for both the Tampa and Sarasota-Bradenton housing markets, there is the possibility of a slide coming in the near future. There is a backlog of more than 22,300 units under construction in the Tampa Bay area, including more than 14,200 units in the Tampa metropolitan area. For the year, lot inventory is up 7.6 percent to 19,491 lots." "Although 268 new homes are planned for development in north Walnut, local schools don't expect a resulting flood of new students. High prices could be a barrier for young families with children. When 30 new homes were built in 2001 at Del Mar and Graves avenues in Rosemead, Garvey School District gained only one student, though the district had expected 10 to 14." "Even at age 50, Judith Max admits to not saving for retirement. 'How?' said the South Lake Tahoe real estate agent when faced with the question Thursday morning outside Bank of the West. 'I'm overwhelmed by taxes in California. I love California, but there's no industry here, and Tahoe's becoming a rich man's paradise.' She plans to sell her home to cash out and move to some place cheaper 'and warmer.'" "And apparently she's not alone. Of the Tahoe Daily Tribune's small sampling, only three out of 10 people ages 18 to 50 said they're saving for retirement. And just one said she's saving enough. Cheryl Sillings, a South Shore financial planner said the baby boomers are falling short on saving. 'I'm guessing we're going to see some defaults,' she said." "Most financial advisers recommend people spend a third of their income on shelter, but many are shelling out over half of what they make. Property values, including those in Tahoe, have skyrocketed. Mary Beth Taylor is struggling, doling out three-fifths of her net income to her mortgage. She's overextended and has dipped into savings set aside for emergencies, not retirement. 'I'm in the negative everywhere I look. I can't afford to save for retirement,' she said." "The median home price for a single-family house in San Luis Obispo County fell nearly 12 percent in December, or more than $70,000. The December 2005 figure was the lowest monthly median price registered since May 2005." "In another measure of the local housing market, permits for new homes were down 14.4 percent in 2005 for the county, with 1,937 permits. The steepest decline in the county was for the city of San Luis Obispo, which saw permit activity fall 69.6 percent to 35 from 115 permits in 2004." "'A one-month adjustment does not justify fear that the bubble is bursting. The figures can be skewed by a few million-dollar homes selling one month and then not the next," said Lenny Jones, the vice chairman for the state association of Realtors. "It's too early to tell if this was a blip in the market or the start of a trend."