“This reflects a characteristically volatile multi-family sector rather than renewed weakness, and we expect homebuilding volumes to rise further later this year,” wrote Paul Diggle of Capital Economics.

Housing starts fell 9.8 percent, but the drop was entirely in apartment construction, which accounts for 30 percent of all residential construction activity, according to the U.S. Commerce Department. Multi-family starts fell by 26.2 percent in June compared to May. Single family housing starts fell by just 0.8 percent month-to-month.

(Read More: Map: Tracking the US Real Estate Recovery)

“Should we be concerned? Not yet,” wrote Patrick Newport of IHS Global Insight. “Builders are still not putting up enough homes. Far from it. By our estimate, underlying demand is running close to 1.4 million. Meanwhile, housing completions in July were 755,000 [annual rate], while housing permits were 911,000.”

Article source: http://www.cnbc.com/id/100893375

Bubbles are swelling in pockets of the U.S. housing sector, especially in those areas that fell the hardest and are soaring back in part due to speculative demand, said Kathy Fettke, founder and CEO of Real Wealth Network, a California real estate services and consulting company.

“When inventory levels are so low, that has everybody kind of in a panic and diving in to buy, and that is driving up prices in some areas that I think personally is creating another bubble,” Fettke told Newsmax TV in an exclusive interview.

As a nation, the housing sector is showing signs of life after the Great Recession.

Watch our exclusive video. Story continues below.

U.S. homebuilding permits touched their highest level in more than four years in November, pointing to strength in the housing market, even though groundbreaking activity dropped 3 percent last month.

Home prices have shown signs of life as well, though some areas of the country in particular may be overheating.

Editor’s Note: Tiny Loophole Found in 70,320 Page IRS Tax Code Could Pay $87,500

Areas hit the hardest after the housing bubble burst in 2007 are shooting back the hardest, as many investors have scooped in to buy cheap and distressed properties.

“In Phoenix, Las Vegas we are seeing prices rise so rapidly, and we really believe that a lot of it is speculative, with investors all over the world coming in and buying up those properties. That makes me nervous,” she said.

“But other areas that are more stable — let’s say Dallas, Houston, Atlanta — these are the fastest growing population areas in the country, with the fastest job creation. So there really are fundamentals there to support the housing market.”

Metropolitan areas with little land are seeing prices shoot up as well, including the San Francisco bay area.

“We work with a lot of teams there selling real estate and just in the last few months they have bumped up their prices in some areas up 30 percent from last year,” Fettke explained.

“That feels like bubble market to me. Our salaries haven’t increased by 30 percent,” she added.

“So really what that reflects to me is very low interest rates that could cause a bubble in some of these markets where people think they are going to see a rise in prices.”

Turning to fiscal matters, successful aversion to the year-end fiscal cliff could affect the housing sector, whose recovery is tied heavily to improvements taking place in the labor market.

The White House and Congressional Republicans are debating a fiscal framework for 2013, with the Obama administration’s proposal calling for tax hikes on those with incomes over $400,000 a year, with Republican countering with a proposed hike on those with incomes of over $1 million a year.

Should wealthier Americans get hit with tax hikes to the point that they cannot hire, the housing sector could feel the fallout.

“The housing market depends so much on job creation so if employers are going to be facing massive taxes, is that going to create more jobs or not?” Fettke asked.

“What we do know is that places like Texas where taxes are very low for employers — they are high on property taxes, but have low employer taxes and no state taxes — we are seeing a very strong economy there, and I do believe that when you tax companies they can’t hire.”

Editor’s Note: Tiny Loophole Found in 70,320 Page IRS Tax Code Could Pay $87,500

© 2012 Moneynews. All rights reserved.

Article source: http://www.moneynews.com/Markets/Fettke-housing-bubble-swelling/2012/12/28/id/469314

Bubbles are swelling in pockets of the U.S. housing sector, especially in those areas that fell the hardest and are soaring back in part due to speculative demand, said Kathy Fettke, founder and CEO of Real Wealth Network, a California real estate services and consulting company.

“When inventory levels are so low, that has everybody kind of in a panic and diving in to buy, and that is driving up prices in some areas that I think personally is creating another bubble,” Fettke told Newsmax TV in an exclusive interview.

As a nation, the housing sector is showing signs of life after the Great Recession.

Watch our exclusive video. Story continues below.

U.S. homebuilding permits touched their highest level in more than four years in November, pointing to strength in the housing market, even though groundbreaking activity dropped 3 percent last month.

Home prices have shown signs of life as well, though some areas of the country in particular may be overheating.

Editor’s Note: Tiny Loophole Found in 70,320 Page IRS Tax Code Could Pay $87,500

Areas hit the hardest after the housing bubble burst in 2007 are shooting back the hardest, as many investors have scooped in to buy cheap and distressed properties.

“In Phoenix, Las Vegas we are seeing prices rise so rapidly, and we really believe that a lot of it is speculative, with investors all over the world coming in and buying up those properties. That makes me nervous,” she said.

“But other areas that are more stable — let’s say Dallas, Houston, Atlanta — these are the fastest growing population areas in the country, with the fastest job creation. So there really are fundamentals there to support the housing market.”

Metropolitan areas with little land are seeing prices shoot up as well, including the San Francisco bay area.

“We work with a lot of teams there selling real estate and just in the last few months they have bumped up their prices in some areas up 30 percent from last year,” Fettke explained.

“That feels like bubble market to me. Our salaries haven’t increased by 30 percent,” she added.

“So really what that reflects to me is very low interest rates that could cause a bubble in some of these markets where people think they are going to see a rise in prices.”

Turning to fiscal matters, successful aversion to the year-end fiscal cliff could affect the housing sector, whose recovery is tied heavily to improvements taking place in the labor market.

The White House and Congressional Republicans are debating a fiscal framework for 2013, with the Obama administration’s proposal calling for tax hikes on those with incomes over $400,000 a year, with Republican countering with a proposed hike on those with incomes of over $1 million a year.

Should wealthier Americans get hit with tax hikes to the point that they cannot hire, the housing sector could feel the fallout.

“The housing market depends so much on job creation so if employers are going to be facing massive taxes, is that going to create more jobs or not?” Fettke asked.

“What we do know is that places like Texas where taxes are very low for employers — they are high on property taxes, but have low employer taxes and no state taxes — we are seeing a very strong economy there, and I do believe that when you tax companies they can’t hire.”

Editor’s Note: Tiny Loophole Found in 70,320 Page IRS Tax Code Could Pay $87,500

© 2012 Moneynews. All rights reserved.

Article source: http://www.moneynews.com/Markets/Fettke-housing-bubble-swelling/2012/12/28/id/469314

Sales of newly built homes fell around 2 percent in May from the previous month, but that was a little better than expectations, given the lousy home builder sentiment number we got this month and the huge supply of competing existing and distressed properties.

But let’s put this monthly move in perspective, shall we?

The 319,000 sales pace is 14 percent higher than the record low set in February, but new home sales are still 77 percent below their peak in 2005, and 900,000 is considered healthy.

But how’s this for an odd statement:

“The one positive in this report was the further fall in the number of new homes for sales, from 172,000 in April to yet another record low of 166,000,” writes Paul Dales at Capital Economics. “With fewer new homes for sale than ever before, at some point homebuilding activity will have to increase, but we can’t see it happening for several years yet.”

That’s the positive??

You could look at the home prices, down 3.4 percent, which is less than the 5 percent drop in existing home prices in May. But then you have to remember all the concessions builders are throwing in, and you also have to look at the fact that the median price of an existing home is 30 percent less than that of a newly built home. How’s that for competition?

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Article source: http://www.cnbc.com/id/43511660?__source=RSS*blog*&par=RSS