Real Estate Prices: Boom

Calculated Risk: California Real Estate Prices: Boom and Bust Notify Blogger about objectionable content. What does this mean? BlogThis! Calculated Risk Click Here to Return to Main Page Politics and Economics Tuesday, March 15, 2005 California Real Estate Prices: Boom and Bust Today I heard someone comment that California Real Estate never goes down. In fact, California RE has declined in the past in both real and nominal terms. Click on graph for larger image. This graph shows the price of California RE based on the OFHEO California housing index . For the real price, the nominal price is adjusted by CPI, less Shelter, from the BLS . (1976 = 100) The graph shows that in real terms we have seen two declines since 1980. The first decline, in the early '80s, lasted 3 years. The second decline, in the early to mid '90s, lasted 6 years. The second graph shows the same information by annual rate of return, both real and nominal. The decline in the '90s lasted 24 quarters from peak to trough. It took 9 years for prices to recover in nominal terms to their early '91 peak. Overall prices declined 12% in nominal terms and 26% in real terms. Even more important for the economy are the coincident declines in sales volume. Real Estate prices are “sticky downward” since sellers are slow to adjust their prices down, and buyers are reluctant to buy a declining price asset. In this regards, real estate is an imperfect market in that prices adjust slowly to changes in supply and demand (unlike commodities like corn or wheat). Although prices do decline, it’s the decline in volume that leads to declining employment in real estate related occupations like construction, RE sales, mortgages, and more, and impacts the general economy. posted by CalculatedRisk at 8:39 PM Comments | Trackback Calculated Risk: a senior executive, retired from a public company, with a background in investing, finance and economics. Guest blogger: Angry Bear Commentator: Economics Roundtable WWW Calculated Risk Previous Posts UCLA Anderson Forecast: False Sense of Wealth Mortgage Debt and the Trade Deficit China Reduces Dollars in Its Reserves, Lehman Says Mortgage Debt Increases 13% in 2004 The Other Trust Funds Fed's Poole: Social Security Needs Small Changes Housing: Excessive Leverage? Housing: Two Worrisome Signs China and the Price of Gas Greenspan's March to Infamy Housing Sites: Housing Bubble Blog The Housing Bubble Prof. Pigginton's Econo-Almanac housebubble.com Bubble Meter Boy in the Housing Bubble Email: Calculated Risk "Homeownership has become a vehicle for borrowing and leveraging as much as a source of financial security." Former Fed Chairman Paul Volcker, Feb 11, 2005 More excerpts of Volcker's Speech and video

Real Estate Listing

Coldwell Banker Real Estate Corporation Today's Mortgage Rates 6.06% APR* 6.225% > Go to Mortgage Center > Apply now Quick Search country United States Australia Bahamas Bermuda Canada Cayman Islands Dominican Republic Jamaica Mexico Nevis/St. Kitts Philippines Saint Lucia Turks & Caicos US Virgin Islands or by map search by price No min $10,000 $25,000 $50,000 $75,000 $100,000 $125,000 $150,000 $175,000 $200,000 $225,000 $250,000 $275,000 $300,000 $350,000 $400,000 $450,000 $500,000 $600,000 $700,000 $750,000 $800,000 $900,000 $1M $5M $10M to No max $10,000 $25,000 $50,000 $75,000 $100,000 $125,000 $150,000 $175,000 $200,000 $225,000 $250,000 $275,000 $300,000 $350,000 $400,000 $450,000 $500,000 $600,000 $700,000 $750,000 $800,000 $900,000 $1M $5M $10M beds Any 1+ 2+ 3+ 4+ 5+ baths Any 1+ 2+ 3+ 4+ new listings in past 7 days only Detailed Search Special Properties country United States Australia Bahamas Bermuda British Virgin Islands Canada Cayman Islands China Costa Rica Dominican Republic Egypt France India Indonesia Ireland Israel Jamaica Lebanon Mexico Netherlands Nevis/St. Kitts Poland Singapore Sint Maarten Spain Turks & Caicos US Virgin Islands Venezuela or by map city state AK AL AR AZ CA CO CT DC DE FL GA HI IA ID IL IN KS KY LA MA MD ME MI MN MO MS MT NC ND NE NH NJ NM NV NY OH OK OR PA PR RI SC SD TN TX UT VA VT WA WI WV WY zip radius n/a up to 1 up to 2 up to 5 up to 10 up to 15 up to 20 up to 25 miles first name last name language Any English Albanian American Sign Language Arabic Armenian Bulgarian Burmese Cambodian Cantonese Chaochou Chinese Creole Croatian Czech Danish Dutch English Farsi Filipino Finnish French Gaelic German Greek Gujarati Hawaiian Hebrew Hindi Hindustani Hmong Hungarian Icelandic Indonesian Italian Japanese Korean Latvian Luxembourgish Malay Mandarin Morrocan Norwegian Persian Polish Portuguese Punjabi Romanian Russian Serbian Shanghainese Slovak Spanish Swahili Swedish Swiss Tagalog Tahitian Taiwanese Tamil Teluga Thai Tongan Turkish Ukrainian Unknown Urdu Vietnamese Yiddish Yoruba Detailed Search country United States Australia Bahamas Bermuda British Virgin Islands Canada Cayman Islands China Costa Rica Dominican Republic Egypt France India Indonesia Ireland Israel Jamaica Lebanon Mexico Netherlands Nevis/St. Kitts Poland Singapore Sint Maarten Spain Turks & Caicos US Virgin Islands Venezuela or by map city state AK AL AR AZ CA CO CT DC DE FL GA HI IA ID IL IN KS KY LA MA MD ME MI MN MO MS MT NC ND NE NH NJ NM NV NY OH OK OR PA PR RI SC SD TN TX UT VA VT WA WI WV WY zip radius n/a up to 1 up to 2 up to 5 up to 10 up to 15 up to 20 up to 25 miles office name language Any English Albanian American Sign Language Arabic Armenian Bulgarian Burmese Cambodian Cantonese Chaochou Chinese Creole Croatian Czech Danish Dutch English Farsi Filipino Finnish French Gaelic German Greek Gujarati Hawaiian Hebrew Hindi Hindustani Hmong Hungarian Icelandic Indonesian Italian Japanese Korean Latvian Luxembourgish Malay Mandarin Morrocan Norwegian Persian Polish Portuguese Punjabi Romanian Russian Serbian Shanghainese Slovak Spanish Swahili Swedish Swiss Tagalog Tahitian Taiwanese Tamil Teluga Thai Tongan Turkish Ukrainian Unknown Urdu Vietnamese Yiddish Yoruba Detailed Search city or by map state AK AL AR AZ CA CO CT DC DE FL GA HI IA ID IL IN KS KY LA MA MD ME MI MN MO MS MT NC ND NE NH NJ NM NV NY OH OK OR PA PR RI SC SD TN TX UT VA VT WA WI WV WY zip radius n/a up to 1 up to 2 up to 5 up to 10 up to 15 up to 20 up to 25 miles office name Detailed Search SM -- My Coldwell Banker SM Let us do the searching for you! With the Coldwell Banker Personal Retriever ® Service Learn more Sign up today! Log In Forgot your Password? Concierge Home Services International Coldwell Banker Commercial® About Us Careers Contact Us Site Map Terms and Conditions Privacy Policy Buy | Sell | Contact | Learn | My Coldwell Banker © 2005 Coldwell Banker Real Estate Corporation . Coldwell Banker ® is a registered trademark licensed to Coldwell Banker Real Estate Corporation.An Equal Opportunity Company.Equal Housing Opportunity.Each Office Is Independently Owned and Operated Except Offices Owned and Operated By NRT Incorporated.

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National Australia Bank - Home loans Personal Finance > Home loans" Personal Business Community ONLINE SERVICES Planning tools Home loans Personal loans Credit Cards Transactions and Savings accounts Financial planning Investments Insurance Private Bank More financial solutions Rates, fees & charges News & information Contact us Apply online Personal Finance > Home loans Home loan centre   CANNEX mortgage star ratings National home loans awarded 5 stars   More...   Home loan products   First home buyer We have a range of different loan options for you to consider.   How much can I borrow? What's the best loan for me? Buying your First home can be a confusing time the National is here to help. Renovating or upgrading your home   Investing Is it time to move or give your existing home a facelift? We are here to help you every step of the way.   Whether you’re new to gearing to invest or are an old hand at it, we have the information & products for you. Want to Apply Now?     Online Phone 13 13 12 , 8am to 9pm EST, 7 days a week Contact your nearest mobile mortgage manager Visit a National branch Home loan products Buying your first home Renovating or upgrading your home Investing Rates, fees and charges Property search Frequently Asked Questions National home loan specialists How to apply Internet Banking Login Register More ... OnLine Trading Login Register More ... JAVASCRIPT WARNING ... The national.com.au website and online services such as Internet Banking require javascript to be enabled. Please visit our Accessibility page for more information. FIND A NATIONAL LOCATION ... State ACT NSW NT QLD SA TAS VIC WA RELATED TOPICS Home loan products Rates, fees & charges Comparison rates How to apply for a home loan TOOLS Home Buying & Selling calculator Home Loan repayment calculator Home Loan Pre-approval Search for a property Privacy Sitemap Media centre Shareholders Careers Locations Contact us About the National © National Australia Bank Limited. Use of the information contained on this page is governed by Australian law and is subject to the disclaimers which can be read on the disclaimer page . View the National Privacy Policy .

Real estate brokers and

CA Real Estate License School for Broker's and Salespersons Directory of Schools HOME | CONTACT | FEATURED DEGREES | SCHOOL GUIDE | RESOURCES Current Users Online Real Estate License School for Brokers Salespersons and Agents ONLINE PROGRAMS Accounting Degree Advertising & Marketing Appraisal License USPAP Art Schools Online Associate Degrees Bachelor Degrees Broker Real Estate License Business & E-Commerce Canadian Online Schools Christian Education Computer Science Criminal Justice Degrees Engineering Colleges GED High School Diploma US High School Directory Graphic Designer Health Care Homeland Security Home Inspector Hotel & Restaurant Human Services Interior Design Information Technology MBA - Masters Programs Natural Health Schools Nursing - RN to BSN Paralegal - Law Degrees Psychology Programs Real Estate School Teaching - Teachers (CTE) US Military Web Development CAMPUS PROGRAMS Accounting Advertising Universities Arts & Design Auto Mechanic AutoCAD & Drafting Aviation Mechanic Business Schools Computer Programming Continuing Education Criminal Justice Culinary & Cooking Dental Office Assistant Diesel Mechanic Training English (ESL) College Engineering Courses Fashion Design Fashion Merchandising Film & Photography Graphic Design Gunsmithing Training Heating - HVAC/R Health Claims Specialist HomeLand Security Hotel & Restaurant Interior Design Information Technology IT Training & Certification Massage Therapy Medical Administrative Medical Billing & Coding Motorcycle Mechanic Microsoft Certifications Nursing Office Software Training Pharmacy Technician Paralegal & Law Real Estate Schools Refrigeration Air Conditioning Surgical Technologists Technology Travel & Tourism Veterinary Science Video Game Art Webmaster Certification Program Offerings: Online Real Estate Licence Renewals for the State of California for Brokers, Salesperson and Agents. We also offer Real Estate Appraisal Licenses for the States of California, Utah, Washington, Wyoming, South Dakota, Idaho, Iowa, Wisconsin, Louisiana, Virginia and the District of Columbia. Highlights for Real Estate, Agents, Brokers & Salespersons Real estate brokers and sales agents often work evenings and weekends, and are always on call to suit the needs of clients. A license is required in every State and the District of Columbia. Our feature schools offer accredited licence for newcomer and renewals for the professional. Well-trained, ambitious people who enjoy selling should have the best chance for success in the field of Real Estate. Real Estate Brokers - Salespersons - Agents One of the most complex and important financial events in peoples lives is the purchase or sale of a home or investment property. As a result, people usually seek the help of real estate brokers and sales agents or salesperson when buying or selling real estate. Real estate brokers and sales agents have a thorough knowledge of the real estate market in their community. They know which neighborhoods will best fit clients needs and budgets. They are familiar with local zoning and tax laws and know where to obtain financing. Agents and brokers also act as an intermediary in price negotiations between buyers and sellers. Real estate agents usually are independent sales workers who provide their services to a licensed real estate broker on a contract basis. In return, the broker pays the agent a portion of the commission earned from the agent's sale of the property. Brokers are independent business people who sell real estate owned by others; they also may rent and manage properties for a fee. When selling real estate, brokers arrange for title searches and for meetings between buyers and sellers where details of the transactions are agreed upon and the new owners take possession. A broker may help to arrange favorable financing from a lender for the prospective buyer that often makes the difference between success and failure in closing a sale. In some cases, brokers and agents assume primary responsibility for closing sales; in others, lawyers or lenders do this. Brokers supervise agents who may have many of the same job duties. Brokers also manage their own offices, advertise properties, and handle other business matters. Some combine other types of work, such as selling insurance or practicing law, with their real estate business. There is more to an agent or broker's job than making sales. They must have properties to sell. Consequently, they spend a significant amount of time obtaining listings owner agreements to place properties for sale with the firm. When listing a property for sale, agents and brokers compare the listed property with similar properties that have recently sold to determine its competitive market price. Once the property is sold, the agent who sold the property and the agent who obtained the listing both receive a portion of the commission. Thus, agents who sell a property they also listed can increase their commission. Most real estate brokers and sales agents sell residential property. A small number, usually employed in large or specialized firms, sell commercial, industrial, agricultural, or other types of real estate. Every specialty requires knowledge of that particular type of property and clientele. Selling or leasing business property requires an understanding of leasing practices, business trends, and location needs. Agents who sell or lease industrial properties must know about the region's transportation, utilities, and labor supply. Whatever the type of property, the agent or broker must know how to meet the client's particular requirements. Before showing residential properties to potential buyers, agents meet with buyers to get a feeling for the type of home the buyers would like. In this pre qualifying phase, the agent determines how much buyers can afford to spend. In addition, they usually sign a loyalty contract which states the agent will be the only one to show them houses. An agent or broker uses a computer to generate lists of properties for sale, their location and description, and available sources of financing. In some cases, agents and brokers use computers to give buyers a virtual tour of properties in which they are interested. Buyers can view interior and exterior images or floor plans without leaving the real estate office. Agents may meet several times with prospective buyers to discuss and visit available properties. Agents identify and emphasize the most pertinent selling points. To a young family looking for a house, they may emphasize the convenient floor plan, the area's low crime rate, and the proximity to schools and shopping centers. To a potential investor, they may point out the tax advantages of owning a rental property and the ease of finding a renter. If bargaining over price becomes necessary, agents must carefully follow their client's instructions and may have to present counter-offers in order to get the best possible price. Once both parties have signed the contract, the real estate broker or agent must see to it that all special terms of the contract are met before the closing date. For example, the agent must make sure the mandated and agreed-to inspections, including the home, termite, and radon inspections, take place. Also, if the seller agrees to any repairs, the broker or agent must see they are made. Increasingly, brokers and agents handle environmental problems by making sure the properties they sell meet environmental regulations. For example, they may be responsible for dealing with lead paint on the walls. While loan officers, attorneys, or other persons handle many details, the agent must ensure that they are completed. 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Real Estate Prices Still

Agricultural Economist Newsletter: Winter 2001--Farm Real Estate Prices Still Rising in Minnesota Farm Real Estate Prices Still Rising in Minnesota Steven J. Taff Average Minnesota farm real estate sales prices just keep on climbing (figure 1). This despite low output prices, rising input costs, and continued uncertainty about the future of federal subsidies. Sales price increases were seen in all parts of the state except in the northwest. In this annual sales price summary, I can provide only an overview, some cursory analysis, and--as always--a few opinions. I'll not bore you with text that simply repeats what's already shown in the charts. Instead I'll spend some time discussing how land transaction data are recorded, adjusted, and employed. I think it's useful to go through some administrative and procedural details to further our understanding of what these data are and what they are not. If this prospect makes you say, "Just show me the data, Steve," then you can stop right after the sales summary section. Or, if your impatience knows no bounds, go straight to the Minnesota Land Economics (MLE) Web site at http://apec.umn.edu/faculty/sjtaff/landdata/index.html and start working the numbers yourself. Farm Land Sales in 2000 Assessors are required to report initial assessments in late fall, based on sales data to date. That's why the data are reported on a "record year" basis: these are the sales that were, presumably, available for assessor scrutiny at the time the initial estimated market-values are calculated. Final values are set by summer, to be used in the succeeding tax year. So, for example, sales made in late 1999 are used by assessors to set initial values for January 2001. These estimates are adjusted in spring 2001, finalized in summer 2001, and then used for tax purposes in 2002. The adjusted record year 2000 sales data were therefore not available until April of this year. Figure 2 shows the distribution of all farmland sales in 2000. The bulk of the sales lie between $500 and $2,000 per acre. I excluded a small number of sales that exceeded $5,000 per acre as well as those involving parcels of land less than 20 acres in size. Both were excluded as not being plausibly "agricultural"--despite their designation on the Certificate of Real Estate Value (CRV) as "agricultural" land. (Although excluded from figure 2, these data are included in the MLE Web site data.) Even though MAE readers and MLE Web site users can view the full distribution of sales prices, most still ask for a single number that somehow captures the story behind the figures. Obviously, for a set of sales that span such a wide range in prices, any single number fails completely to accomplish this end. Movements in averages, while arithmetically correct, usually fail to tell the entire story. The particular average I use in this article is a location- and size-weighted mean (table 1). In last year's farm real estate report ( agecon.lib.umn.edu/mn/mae699.pdf ), I discussed the usefulness of such weighting as well as the desirability of examining sales data at the smallest geographic scale possible. Table 1. Minnesota farm real estate sales summary Record year Number of sales Acres sold Average price* 1996 2,504 263,728 936 1997 2,641 296,803 1,039 1998 2,724 303,968 1,113 1999 2,212 235,359 1,196 2000 2,258 250,979 1,222 * Location- and size-weighted per-acre mean Figure 1 compares the movements of actual sales price averages with those two other estimates of land value--the United States Department of Agriculture (USDA) annual state estimates (based on a farmer opinion survey) and the average assessor estimates (the location- and size-weighted mean estimated market value). The University of Minnesota sales prices averages are location- and size-weighted means. The fact that all three (somewhat) independent estimates of farmland real estate values shown in figure 1 move in lockstep adds credence, I believe, to the conclusion that, on average, farmland values really are increasing in Minnesota. Geographic variations in real estate values for the past 11 years are shown in the box-and-whisker plots of figure 3. (District boundaries are shown in figure 4.) The range of sales prices for each district for each year is shown by the endpoints of the vertical lines. The ends of each box show the prices at which 25 percent of the sales were higher (or lower). The median is indicated by the horizontal bar within each box. So, for example, the median Central district farmland sale was about $1,200 per acre, with 25 percent of the sales lower than $750 and 75 percent lower than $1,850 per acre. In previous years' reports, I've noted the wide variation in average price movements among districts. Such differences were accentuated in 2000 by the continued climb of values in the South East district combined with the continued stagnation in the North West district (figure 5) . Farm Sale Data When a Minnesota property is sold, the transaction details must be recorded at the county courthouse on a form called a CRV. On it, the seller attests that such-and-such a property was sold to so-and-so on a certain date for a specific price. Other information about the property (its size, soil characteristics, prior year's estimated market value) is often entered on the CRV as well. Frequently, the per-acre prices that underlie this article and are also shown in the MLE Web site are not the prices entered on the CRV. Long before a land sales figure enters the official data base, it has been passed through an array of filters and adjustments designed to make comparison among transactions more meaningful and more reliable. Recording the Transactions There are many possible slips between an ownership change and data analysis. Of course, there is always the chance that simple recording errors are made. For example, numbers may be miscopied from bills of sale onto the CRV, or into a computer file, or into a spreadsheet. There is also a chance of misrepresentation. The person who fills in the CRV might have a reason to understate or overstate the actual sales price--perhaps to avoid a tax. This, of course, is illegal, but, as any courthouse veteran can tell you, it occasionally happens. Not every sale receives further processing. Local or state officials remove from subsequent analysis any sale not deemed "arms-length," because it was sold, for example, to a member of the seller's immediate family. Or, a sale might be pulled because the new buyer intends to convert the land to a non-agricultural use. Adjusting the Prices After this filtering, sales prices are frequently adjusted to make comparison among sales more appropriate. First, to expunge the effects of inflation, sales prices are deflated by an officially reported rate to January 2 of the year in which they were recorded. This "adjustment for time" is fairly minor in years (like the past decade) where inflation has been low. The second adjustment is "for terms." Not all farm real estate sales are for the full property. Some are made through a contract for deed, an arrangement that allows the buyer to pay a certain amount now and other amounts at stated intervals. Until the final payment is made, the property remains in the possession of the seller--even though it has been "sold." Because the full payment schedule is entered on the CRV, the Department of Revenue can calculate a present value of the initial and subsequent payments at an official discount rate. This becomes the official sales price of the property, regardless of what the buyer and seller had in mind when they sealed the deal. Adjustments don't end with a time- and terms-adjusted sales price, honestly reported and accurately recorded. In most cases, users of the data are interested in per-acre prices, not per-parcel prices. That means some chosen total price must be divided by some total acreage. But which price? Which acres? Should we use the total price or should we first subtract out the value of buildings, personal property, ancillary property, or machinery to get closer to the "true" land price? In this article (and on the MLE Web site), I choose to follow conventions established years ago in Minnesota. I report the time- and terms-adjusted total sales price, minus the value of personal property, divided by the entire acreage of the parcel. That's why, when I'm being careful, I speak of the average price of farm real estate, not of farm land . Employing the Data The sales reported here are only those recorded between October 1, 1999, and September 30, 2000. These "record year 2000" sales are so bundled because of the way real estate transactions are used to help local assessors value land for property tax purposes. Strange as it may seem, the Department of Revenue does not collect sales data merely to satisfy the data cravings of University economists like me. No, statewide sales data are collected principally to create statistics that are used to "equalize" property tax valuations across county boundaries. Each year, county assessors are required to assign an estimated market value (EMV) to each of the thousands of real estate parcels in the county. The estimate is supposed to be based on an examination of similar properties that were actually sold recently. (The combined valuations for each township, city, or county are the source of the Land Values--in contrast to the Farmland Sales--data on the MLE Web site.) Because every county has its own assessor who uses largely independent valuation procedures, there are inevitably discontinuities across county lines--even for adjacent properties. Farmer Brown wonders why Farmer Olson's land, just across the fence line in the next county, carries an assessed value that is lower by $200 per acre. The state has created an equalization procedure that is supposed to smooth over such discontinuities. Assuming that nearby properties really would sell for similar prices, any observed difference in assessed values for otherwise similar properties is presumed to be evidence that one or both of the assessors is either undervaluing (that is, assigning an EMV that is too low) or overvaluing properties. To test this, the state calculates a sales ratio (the EMV divided by sales price) for every property sold in a particular area. If an assessor systematically undervalues properties (shown by sales ratios that are consistently lower than some threshold), the state might demand the EMVs in that jurisdiction be uniformly raised, to better accord with what is thought to be "true" market conditions. How Accurate Are the EMVs? We can see for ourselves how close the final assessor estimates are by comparing actual sales prices against the previous year's estimated market values for the same property (figure 2). Each point in the figure represents one sale. For example, the rightmost point is for a property that was estimated to have a value of $4,900 per acre, but actually sold for only $2,900 per acre. While some of the estimates are obviously way off (like this example), the bulk are pretty close. In most cases, the EMV was lower than the sale price, but in a neatly predictable manner. A simple one-variable regression model, shown as the straight line in the figure, accounts for nearly 75 percent of the observed variation in farm real estate sales prices. Parting Thoughts What accounts for the ever-onward-and-upward movement of average farm real estate prices in Minnesota? We need only to round up the usual suspects, most of which I have discussed at length in previous issues of MAE . These include 1) perennial farmer optimism about future crop and livestock prices, 2) expected extensions of federal farm subsidy programs, 3) continued favorable local property tax treatment for farmland, 4) the desire of some farmers to increase the size of their current operation by buying adjacent farmland, 5) the desire of some non-farm buyers to use land as a hedge against inflation, and 6) inflation itself. An additional suspect that we need to add is the increasing prominence of location even in rural land markets. We simply can't explain current price levels on the basis of income potential (including subsidies) and speculation potential alone. Clearly, where the land sits with respect to job centers and what it looks like is influencing the price buyers are willing to pay for a particular parcel of land. As always, I caution potential land buyers and sellers about reading too much into the average land prices reported here and elsewhere. If you've got land to sell or if you have a hankering to buy land--look before you leap. The financial stakes are too high for casual empiricism. Hire an appraiser. Talk with your spouse. Check your finances. Think about the children. Be careful out there! Steven J. Taff is an associate professor and extension economist with the Department of Applied Economics at the University of Minnesota. Return to Minnesota Ag Economist Newsletter Index Page University of Minnesota Extension Service HomePage