Monday, April 03, 2006

How Strong is Your Market?

I found the following data here; I just plotted some of it so as to put it in a visual context (I excluded New Orleans' data).

The graph shows for various metropolitan areas:
  • Cost of renting (smaller numbers mean renting is more affordable vs. owning).
  • Housing opportunity index (affordability, smaller numbers mean less affordable).
  • Total percentage of loans that are ARM or negative amortizing.
Click on the graph for a larger view.

Enjoy.


Update: According to this article, if ARMs, Neg Ams, etc. are removed or curtailed, then the result for the housing market would be to "precipitate a disaster of epic proportions". Looking at the above graph, the Bay Area (including Marin) is far from immune to such a disaster.

4 Comments:

Blogger Bubble-X said...

Cool stuff. So one thing to take away is that the areas with more ARMs are going down quicker. That is to be expected. When long rates rise, the rest of the areas will get hit. This explains a bit more about why the Northeast has hung on a bit loger.

Apr 3, 2006, 11:30:00 AM  
Blogger Marinite said...

It would be interesting to take that data, group it into West and North East, and then plot them against each other. I leave it to you or someone else to do that.

Apr 3, 2006, 11:32:00 AM  
Anonymous Anonymous said...

If a logarithmic chart is used the 2010 value is about $210,000.
And if the inflation numbers are understated, prices are not as overvalued as the numbers suggest.
I think that the prices will be flat to down 3-4% for the next 3-4 years, and that rents will increase 4-6% until home prics are about 10-12 times annual rent nationally and 13-15 times annual rent in Marin. his is what happened after previous price runups.

Apr 3, 2006, 2:30:00 PM  
Blogger marin_explorer said...

"logarithmic charts"--what is that going to tell us that we don't already know?

Personally, I've lost count how many HPI charts and overvaluation indices I've read suggesting the level of overvaluation locally. Then, I've actually compared individual home values over the 1998-2006 period against long-term historical trends. I've found my results to corroborate between datasets, which hasn't made me too bullish that high BA RE prices are here to stay. Then again, more good data isn't a bad thing. If people have a good argument to present, they should get to specifics.

Apr 3, 2006, 4:18:00 PM  

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