Is Buying a Home Still a Good Bet?

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March 26 (Bloomberg) -- Trulia Chief Economist Jed Kolko and Metrostudy Chief Economist Brad Hunter discuss U.S. housing on Bloomberg Television's “Bloomberg Surveillance.” (Source: Bloomberg)

You are doing the digital thing and what's really going on.

Brad huinter, what is the pulse you see right now?

We are tracking the new home developments around the country.

Everybody is talking about what happened in the last couple of months with new home sales and traffic and conversions and february whether?

Weather was a big part of it but i think it is a little overblown.

What is the trend right now?

Sales are going up but there is not as much speed as a month ago.

You see this tic by tic.

What is the momentum?

Two things are holding back the housing momentum.

Prices are up nationally a little more than 10%. mortgage rates are up about one percent over the past year but also, one of the big engines for the housing recovery has been investors buying single-family homes to rent them out and we see less of that now and prices are higher.

The big question is whether job growth and income growth will pick up.

What do you observe in the kitchen of homes were couple says should we list the house now or not?

Will the supply come on?

More people are saying yes especially places where we see price appreciation the last couple of years.

No one wants to sell her home at the bottom.

Now we are seeing a big increase.

We are not selling, dear, we are going on a carnival cruise.

You can take a home equity line and then go on a carnival cruise.

There is this debate whether to rent or buy.

Where is that balance now?

Because rates are still so low by historical norms, it still looks cheaper to buy.

Almost everywhere in the country but not in manhattan.

It looks more expensive in manhattan to buy than to rent.

What do you see in florida?

Miami is extremely strong.

Florida is a mixed bag.

We are approaching the final stretch of the selling season in florida.

I talked to some builders and they say what we are on plan others say there are 20% low plan.

It is extremely mixed.

Southwest florida is very mixed in southeast florida as much stronger and more consistent.

Central florida is a big mix as well so it's all over the map.

Let's look at california.

You say home prices are undervalued.

With facebook making a big deal, you have a lot of newly minted billionaires going out there and spending money on new homes.

That will keep the market going, isn't it?

Nationally, houses or five percent undervalued but california is prices are looking overvalued.

Not bubble territory yet.

We are far from where we were last decade.

What is the difference in the game now in silicon valley versus the last boput?

Nowhere near, still very different.

In the last decade, prices looked 50% or more overvalued compared to fundamentals like incomes and rent.

Now in silicon valley, rises look five percent or 10% overvalued.

Every market really is local.

Toll brothers as noted that companies are making more money because it is moving into cities and putting up the holdings.

As opposed to homes.

-- are putting up buildings as opposed to homes.

Will we see that in suburbia?

I think we are still seeing this resurgence of downtowns.

What we have also seen is a huge surge of multifamily for rent.

I think that will start to peek out pretty soon and we will start to see where there is enough supply and huge increases in rents last couple of years will slow down.

We talked about how the home prices will slow down.

Going back to the question about of bubblel,ot prices are at peak levels.

That will have an impact on the builders going forward.

New-home sales are not the bulk of the market, it is really existing home sales.

When you get new-home sales data, what do you read into it?

New-home sales right now are about 1/10 of the market.

Normally, it is 6 to 1. there was low construction and there were foreclosures that have added to the existing home side.

That has pushed high but i think we will see continued strength in the apartment construction sector.

Many young adults are at the point where therey are looking to move out of their parents houses.

It is still strong on the rental side.

Supply versus demand -- there is debate about what is holding back builders and they are pointing to supply constraints.

How much is it really supply constraints with expensive labor versus weak demand for single-family homes?

Last year, it was all about supply.

The builders said i cannot get lots or keep trades on my site.

This year, that is still an issue but we also have the demand side.

The consumers are afraid.

Many of them pulled forward and bought in the first half of 2013 so they are not there in as large in as large a number to buy this year.

Back to the weather thing, the weather was certainly a big factor even in raleigh and atlanta were builders were unable to complete homes and people not coming up to five but even in phoenix, las vegas,

This text has been automatically generated. It may not be 100% accurate.


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