Another example of bipolar real estate markets
see "D.C. Area Housing Market Cools Off" (Washington Post, 7/25/05) http://www.washingtonpost.com/wp-dyn/content/article/2005/07/24/AR2005072401133.html and "Existing Home Sales Set Record in June" (AP via Yahoo, 7/25/05) http://biz.yahoo.com/ap/050725/economy.html?.v=13 On Monday, the National Association of Realtors announced that existing home sales set records for quantity and median price in June, with the median price jumping 14.7% to $219,000 from a year ago, the biggest year over year increase since 1980. The Association notes that mortgage rates have risen for three straight weeks, "a development they expect will start to dampen both demand and prices." On the other hand, David Lereah, the NAR's chief economist, says "Just when you think sales activity is ready to settle into a more sustainable pace, the housing market continues to surprise." As I've mentioned, trying to time the end of the bull market in real estate is like catching the proverbial falling knife, especially since unlike the stock market it can be and is very different from city to city, and even from one area of a city to another. At the same time, the Washington Post is reporting that the DC area housing market has cooled off substantially with the number of houses sold falling dramatically in Northern Virginia and DC, especially at the high end. Prices are more stable than falling, but houses are taking longer to sell. To me this sounds like the end of the local bull market, just as I posted a piece about the other day regarding Denver real estate. I continue to think the dominoes are falling one at a time and that real estate will not be a good investment for at least five years, maybe ten.
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