Posted on 05/17/2006 12:34:36 PM PDT by ex-Texan
Slowdown in residential building and home sales will be felt throughout the economy; weaker jobs and consumer spending expected
NEW YORK (CNNMoney.com) - You don't need to be in the market to buy or sell a home to be affected by the cooling housing market.
[Everybody studies home sales] * * * because the sector has lifted * * * consumer spending and economic activity.
This week has brought several new readings indicating that the super-heated real estate market of 2004 and 2005 is rapidly fading in the rearview mirror.
Housing starts and building permits were down sharply in April, and builder confidence is at its worst level in almost 12 years, according to an industry survey.
And the median price of existing home sales fell in the first quarter compared to the fourth quarter, and while prices were still up year-over-year, the pace of growth slowed.
Even if prices don't fall, even if there is no housing bubble about to pop, the cooling real estate market will be felt by many of those who may not be thinking about real estate prices.
"It's going to be very similar to the stock bubble, but even more so. Many who didn't own stock lost their job when the market plummeted," said Dean Baker, co-director of the Center for Economic and Policy Research, and one of those who believes housing prices have resulted in an asset bubble ripe for a correction.
"They might not be directly connected to the housing industry, but they could find themselves affected, even if they work at a factory, or at a local mall. A lot of people have been sustaining their consumption by borrowing against the rise in their home's equity. If that stops, it certainly has to slow consumption considerably."
(Excerpt) Read more at money.cnn.com ...
Is this the same money.cnn.com that has bemoaned the awful economy of the last 5 years, 3 months, and 27 days?
Here in the San Diego Area, they have been touting this on the radio, on TV, nd in the papers for 18 months. Houses reached a level (prices), but have started to go up again.
Sorry, they are the boys who cried "Wolf".
State home sales surge in 2006 (WI)
http://www.jsonline.com/story/index.aspx?id=424334
Well, that's the risk you run when you go with an ARM.
The 'greater fool theory' works wonders in real estate. Go figure.
It's what happens when interest rates raise.
Housing slows.
Ya don't need a f-ing m.b.a. to figure this stuff out there pal.
http://money.cnn.com/2004/08/26/news/economy/housing_bubble/index.htm
CNN has been wrong before....theyll be wrong again.
From Aug 04.....enjoy
A market slowdown is a good thing. Guess what also happens when prices keep going up 25%? Reassessment. All of those people who are still in their house ten or more years may have good equity on paper, but now their property/school taxes have gone up. In a stable market, the libs don't have as much leeway to "adjust to market prices."
But then again, we can only look at the downside and be depressed, right?
According to the WSJ, $2 Trillion of mortgage debt (about 25% of outstanding mortgage debt) will come up for an adjustment in 06-07. It is projected that 1-in-8 will default.
Not slowing down in my area, they can't build them fast enough, that's lead to increased (rediculous) prices on new and old, crap for the most part, houses.
You can get rich buying foreclosures. But wait until after November, 2007. Housing needs some shaking out. ContemptofCourt is right in post # 12.
My gf was flipping channels a few days ago and some reality show was on called "The housewives of orange county" that is supposed to show 5 wealthy females from Orange county area of California and dealing with their families/ kids / boyfriends.
All of them were in real estate, except one who sold insurance. One is a former 1980's playboy playmate who now is a realtor for million dollar homes.
I hope their is a massive real estate correction just because nothing would give me greater pleasure than to see these people go down in flames and booted out of their gated communities.
CNN has a vested interest in creating the illusion of a shaky real estate market and poor economy - its called the November elections. Stand by they will be selling more of this crap.
We're all gonna die! Run!
Why do you pound on this particular subject relentlessly week after week? Are you really a conservative or are you a democrat operative?
I guess that CNN had better not report on housing stocks or industry stats, which are all in the crapper.
I mean, Mr. Ex-tex, we got the point about three months ago that you think housing prices are going to decline. So does everybody else; the question is by how much and nobody knows. So what is the point of posting endless negative stories from biased MSM writers about the housing market?
Actually housing industry stats are still quite strong when you look at long-term history. Last I hard, home building is down from the 2005 peak and back to the 2004 level, which is still very strong. I tell you what, I'll listen to this housing expert on KFNN tomorrow morning here in Phoenix and tell you what he says. Price corrections are completely normal and expected in every market, including housing.
You may need to pay more attention to your golf game.
Is that a silver lining? I don't know what will happen, neither do you, journalists (especially) or any "expert."
Here's what I know: interest rates were extremely low. People who bought with an ARM at that point were not smart. The world is full of not smart people, if their rates rose they can sell at a profit, or take the hit (they were banking on increasing wages...if they didn't get them they didn't make a great deal).
Life is a risk, if you bought stock in Pets.com, you lost. At least if you buy a home you can live in it, and probably make a profit if you need to sell because your ARM kicked in.
Why?? Did any of them take money out of your pocket? If not, why the animus toward some people who saw an opportunity and took it?
actually down 214
Come one, admit it. You're a 20 year-old liberal college student living in an apartment in Oregon with autographed John Kerry posters on the wall...lol. I have serious doubts that you're actually a conservative. You post nothing but negative news--100% negative stuff, IIRC.
Just one more thing, sir. Why have you posted at least a few times that you "live in the People's Republic of Oregon", even when nobody asked you where you live? Is the "senior citizen living in the People's Republic of Oregon" story that you use...now is that actually a cover story for a young liberal troll?
ex-Texan's area of interest is actually very narrow -- almost exclusively real estate. I believe he's a conservative because the recent RE boom goes against conservative sense...
Why does he repreatedly tell people he lives in the "People's Republic of Oregon" when nobody asked him where he lives? Why would a consevative Texan move to Oregon in the first place? His story doesn't make much sense; trollhood fits the observed data better than his story.
So tell me sir, what high school did you graduate from in Texas? You have one minute to respond...this is a troll test...lol.
Who knows why he moved? Though I will say that old time Oregonians have much in common with Texans. These are people with bumper stickers that said "Welcome to Oregon, Keep Moving Stranger" and "Don't Californicate Oregon."
He probably says "People's Republic of Oregon" because it irks him.
Also, I agree with him in many of his assessments. Bad news is bad news. And if it's true, then it's true.
But why would a conservative post consistently bad news on a conservative website? Why have I never seen him write anything postive about the economy during a time of very strong growth and employment, and strong productivity gains? If you ask me he's probably another Willie Green, whoever he was.
Uh, because bubbles -- whether in dot coms or real estate --are addictive? During the dot com bubble I couldn't look away. I was like one of those people who freeze on the beach when the tidal wave rushes in -- I remember checking the price of Razor Fish every day. Same with with real estate. Ya know it's going hit, even as it's rising beyond all reason.
fyi -- a friend in real estate recently gave me a tour of a $20 million apartment here in NYC. Standing in this cavernous space was like standing under the lip of the tidal wave...
Jealous?
But our economy rides out all of these temporary bubbles. Because only a small percentage of people bought their houses near the top, there will not be a lot of foreclosures and bankruptcies becuse of a decline in housing prices. The economy will go cruising right along, except in the eyes of the MSM and liberal democRATs who will portray this as some kind of unusually serious event.
NYC is surreal, isn't it. It's like some wild virtual reality software game. That sounds like Tokyo: a $20 million apartment...lol.
You have been predicting a housing bubble burst (as in collapse) for four years. The best you can do is a slowdown?
You are the Willie Green of housing.
Democrat (or Buchannon) operative, just like Willie Green was on job losses (how'd your predictions turn out, Willie? lol!).
Doom and gloom, sky is falling.
I agree that the economy/America can and will withstand the housing bubble. There will be some pain, but it won't be Germany in the 1930s. But again, there will be some pain shouldered by everyday folks.
However, I believe part of the attraction with bubble is the suspension of the "rules." All the rules change when it comes to bubble. Look at the "no money down" mortgages -- the first rule of mortgages was always a down payment, right? And then there's the money -- it's like standing in line at the local convenience store and the guy in front pulls out a wad of 100 dollar bills...it captures the attention.
NYC is still in a bubble phase. Many of the people buying million dollar one bedrooms don't remember when real estate crashed in the early 1990s here. NYC can indeed be surreal, but it always lands back in reality.
Are you for "taxes on the rich" too? You know, the rich get richer as the poor get poorer. [/sarc]
I'm not disagreeing. I've had ARM's and have done very well with them. Interest only can be a fool's game.
My problem is the doomsayers who blame the market, bubbles etc. If you buy a house and you are clueless to the options..or worse if you know the options but take a risk...then live with the risk. Housing prices go up, they come down, interest rates come down, go up. If you believed that there are never corrections to any market, or that interest rates may go up, or that housing prices never come down, then the buyer is to blame for being a fool, not the "bubble" or the "president" or China.
That's my problem with these doom posts. While it's good to track the housing market, it doesn't apply locally.
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