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Most overpriced home markets

By Les Christie, CNN/Money

Even as real estate as a whole stays strong, some once red-hot markets have cooled. Which is next?

The Denver metro area went from consistent double- digit house price gains from 1998 to 2001 to little movement since. In the second quarter, single-family home prices in Denver rose just 2.7 percent from a year earlier, according to the National Association of Realtors. San Diego has slowed from 29.8 percent in 2004 to just 8.2 percent in the second quarter. Las Vegas from 48.7 percent growth to 11.2 percent.

This may be just the beginning. According to Celia Chen, economist for Economy.com, there could soon be some major pullbacks in the most heated regional housing markets. (See table below for her list of most overpriced markets.) Ingredients of a home-price boom Housing booms occur in places with growing populations, vibrant economies, and expanding job markets. There's also often an X-factor -- whether the area has limited room for expansion, Manhattan island being the classic example. That also explains why cities such as Dallas and Austin have had more modest home-price gains despite strong population and economic growth. When land gets too expensive, a developer can purchase land down the road for a lot less money.

In Austin, prices have risen just 5.0 percent over the past 12 months. The median priced home there is $166,800. The scene is Dallas is similar. Outside a few hot markets in the United States, said Chen, there's no housing bubble. She points out that when comparing home prices to income, this ratio is quite small in most of the country: 2.4 to 1 in Wisconsin, 2.2 to 1 in Kentucky, and 2.9 to 1 in Illinois. Where that ratio gets badly skewed is in Massachusetts (5.9 to 1), California (8.3 to 1), and Hawaii (10.1 to 1).

Only in about 20 metro areas, mostly located in eight states, does the relationship of home price to income defy logic, according to Chen. The bad news is that those areas accounts for roughly half the value of all the housing in the country.

Low interest rates have helped throw those markets out of whack by driving up prices in two ways: They enable buyers to afford more expensive homes and give entry to first-time homeowners who would otherwise remain renters. Investors and second-home buyers have also entered the market in high numbers, throwing fuel on the fire. Investors increase the potential volatility of local markets; they're more likely to bail when markets stagnate or turn down. Even in overpriced markets, Chen does not expect huge drops in housing prices. "It's being compared to a stock market bubble, but homeowners can simply take their product off the market rather than sell at a price lower than they desire." Consequently, house-price growth tends to slow for a good year before any declines appear. The market may remain in a trough for a few years, before the cycle turns up again.

Fresno, CA
West Palm Beach - Boca Raton - Boynton Beach
Bethesda - Frederic - Gaithersburg, MD
Washington - Arlington - Alexandria, DC-VA-MD- WV
Bakersfield, CA
San Diego-Carlsbad-San Marcos, CA
Fort Lauderdale - Pompano Beach - Deerfield Beach, FL
Visalia-Porterville, CA
Santa Barbara - Santa Maria - Goleta, CA
Sacramento -- Arden - Arcade - Roseville, CA

37 Denver- Aurora, CO

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The Buck Stops Here...

Robin McGlone Why is a Dollar Called a Buck?
THE BUCK STOPS HERE WHY IS A DOLLAR CALLED A BUCK? Before the days of paper money, Americans traded animal skins, including deer and elk bucks, for goods and services. Hence the word "buck" to describe money and here are a few other fun facts about money.

During the Civil War, the Bureau of Engraving and Printing was first called upon to print paper notes in denominations of 3 cents, 5 cents, 10 cents, 25 cents and 50 cents. The reason for this is that people hoarded coins for their intrinsic metal value, which created a drastic shortage. These first bills, called greenbacks, were used to pay Civil War soldiers.
Martha Washington is the only woman whose portrait has appeared on a US currency note, appearing on the face of the $1 Silver Certificate of 1886 and 1891, and the back of the $1 Silver Certificate of 1896. There have not been any women featured on US paper currency in the entire 20th century.
Why are US notes green? No one is really sure. However, in 1929, when the Bureau of Engraving and Printing began making smaller size currency, green was continued because pigment of that color was readily available in large quantities. The color is relatively high in its resistance to chemical and physical changes, and green has now been psychologically identified with the strong and stable credit of the US government.
The origin of the dollar sign $ has various explanations. The most widely accepted is that it is the result of the evolution of the Mexican or Spanish "PS" symbol for pesos. This theory, derived from a study of old manuscripts, explains that the S gradually came to be written over the P, developing a close equivalent to the $ mark. It was widely used even before the adoption of the United States Dollar in 1785.
Contrary to popular belief, the automobile pictured on the back of the $10 note is not a Model T Ford. It is simply a drawing by the person who designed the bill.
The United States Secret Service was originally formed in 1865 to combat counterfeit money. At that time, as much as one-third of all the money in the United States was estimated to be counterfeit. Currently, about $250,000 in counterfeit money still appears each day!
Did you know that a quarter has 119 grooves around the edge, and a dime has 118? And do you know the purpose of the ridges on the edges of coins? Without ridges, it is possible to scrape metal off coins without it being obvious. In the days when coins were made of silver or gold, a person could have made a good, but illegal, living from shaving coins and selling the precious metal.
How long does money last? The Federal Reserve System lists that a $1 bill lasts about 22 months; $5 bills for 2 years; $10 bills for 3 years; $20 bills for 4 years while $50 and $100’s enjoy a relatively long life of 9 years. Coins, on the other hand, generally stay in circulation around 30 years.

For the Jeffco School Site...
Home prices post record gains

(CNN/Money) Second quarter numbers are in for nearly 150
Home prices post record gains Second quarter numbers are in for nearly 150 markets. How does your home town stack up? BACK TO STORY: Record gains in home prices NEW YORK (CNN/Money) - Single-home price growth over the 12 months ending June 30 was the strongest in history, according to the National Association of Realtors. In its quarterly survey, NAR found that U.S. home prices rose at an annual rate of 13.6 percent, to a median price of $208,300. The table is in the link below is based on data for the second quarter from the NAR released on Aug. 15. Third- quarter data are due Nov. 15. You can rank the table in many ways. Take a look...

Of the 149 metro areas surveyed, 67 showed gains of more than 10 percent. The Phoenix market, up 47 percent since the second quarter of 2004, led all metro areas. The median home price there is $243,400. Seven metro areas posted price declines; the most severe was in the Kalamazoo/Portage area of Michigan, where home prices have declined 3.7 percent, to $122,600. The lowest priced market was Danville, Illinois. There, the average home is $73,400. Though that's up 16.9 percent from the second quarter a year ago.

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When the leaves turn...


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