This isn't about Starbucks coffee froth.. the word was part of Greenspan's testimony to Congress.
....Although a "bubble" in home prices for the nation as a whole does not appear likely, there do appear to be, at a minimum, signs of froth in some local markets where home prices seem to have risen to unsustainable levels.
What was he trying to say? Is he trying to cool the real estate market? Time has a cover story about America's obssesion with housing market (subscription only).
Meanwhile, here is a follow-up write up from WaPo about market conditions that are still hot, hot, hot in certain places.
A near-record 43 metropolitan areas had average appreciation rates at or above 20 percent, and six -- Bakersfield, Salinas and Visalia in California, Las Vegas and Reno in Nevada and Palm Bay-Melbourne in Florida -- topped 30 percent. None of the 265 metropolitan areas in the federal study experienced annual declines in values, and no state had a rate of gain lower than the national consumer price index inflation rate of 3.1 percent during the year.
But not all the signals were positive. In fact, there are distinct hints that some of the zestiest markets may already be seeing slowdowns. For example, of the top 20 metropolitan high-gainers, not one had an annualized quarterly rate that equaled or exceeded its appreciation rate for the year.
Here's more news about the housing market from Real Estate Journal.
Housing industry economists raised their forecast for home sales this year, noting that demand remains strong due to lower-than-expected mortgage rates.
Economists at the National Association of Realtors, a trade group, said they expect home sales to total a record 8.13 million units in 2005, up 1.8% from last year. Of that total, sales of previously owned homes are expected to reach 6.89 million units, up 1.6% from 2004. Sales of newly built homes are expected to total 1.24 million this year, up 3.2% from 2004.
Washington Metro housing activities has slowed down a bit in a typical month of June..housing stay longer on the market, unlike the previous traditionally strong months April and May when houses could sell in a matter of days. However, all indicators still showing strong market conditions.
