Posted on 10/26/2006 12:53:25 PM PDT by GodGunsGuts
The price of existing homes last month fell 2.2 percent, the largest monthly decline in the almost four decades the number has been tracked, according to an industry report released yesterday.
Nationwide, the number of existing single-family homes sold fell 14.2 percent in September compared with September 2005, according to the report from the National Association of Realtors. The number of sales has fallen each month since March.
Prices fell everywhere in the country, with the Northeast and West most affected. Declines were more moderate in the South, which includes the Washington area....
(Excerpt) Read more at washingtonpost.com ...
If I didn't know any better this might scare me.
Housing has slowed so you become purveyor of doom and talk about fundamentals that don't exist. Over the past two months housing has slowed a great deal and you've cited that as vindication of your doomsaying. What you fail to recognize is that over that same two month period the Dow has increased by more than 6%. This tells me that investors are confident in our economy and that your fundamentals are fundamentally flawed.
I have a tenth-ounce goldpiece. It has not earned a penny of interest in 20 years.
yitbos
Why?
In a word "liquidity".
yitbos
Any facts to go with your 120 to 80 factoid?
Now you're just making stuff up. What's the dividend yield on the Amex Gold Bugs?
The World Bank is warning us? ROFL!
We had trade and budget deficits throughout the 80's and 90's and your precious metal sucked wind.
Look at that. The Treasury is having so much trouble unloading our debt instruments that the yield has moved from 5.1% to 4.72% over the past six months. Yeah, they're really running from the dollar. LOL!
Possibly but Texas property taxes are causing this early retiree to move to a State with an income tax.
There can be no arguing the fact that, for most Americans in most states, owning a home is a good investment. You have to live somewhere, so why not take the money it would cost to rent (after taking the mortgage and property tax deduction) and buy a house? It's better than putting it into just about any other ordinary investment (even gold!) and you get to live rent-free.
Where the whole house of cards begins falling apart, unfortunately, is when you have new buyers -- a working couple in their 20s, for example -- signing up for a variable-rate, or worse, an interest-only, loan that they barely qualify for. Minimum down payment, no other assets but a car (which is financed, also) and a baby or two on the way or planned.
Should the husband or wife lose his or her job, they won't be able to make their house payments. After six months, the lender will foreclose. The house may have increased in value, but don't expect the poor couple to benefit from that after it's foreclosed on. And don't expect the bank to put any money into as much as cosmetic improvements once they get title, because banks don't do that; they just want to get it off their books.
So, a house that's worth maybe $300K will go on the market for $275K and sell for $270K, leaving the bank whole but the former owners wiped out. They won't be buying again soon.
Multiply this scenario by literally hundreds of thousands and you understand why it is that home prices can take a dip, even though, as you say, they are way above what they were 40 years ago.
It's just that only a small fraction of the population has been in their home long enough to realize that kind of gain.
The other big factor, closely related to liquidity, is that the US and Canada have the largest economies and the largest financial markets in the world, and that greatly reduces the risk of capital flight out of the US & Canada. The reason is simple: there's nowhere else for all the capital invested in the US to go because the foreign markets are much too small to handle it all and investors don't want to go there anyway for reasons mentioned above.
You may want to check you math on that. Assume:
August:
3 McMansions sell for $1,000,000 => $3,000,000
70 Townhomes sell for $100,000 => $7,000,000
Therefore, 73 homes have an average selling price of $137,000
September:
2 McMansions sell 1,050,000 => $2,010,000
73 Townhomes sell for $105,000 = >7,665,000
Therefore, 75 homes have an average selling price of $129,000
With those results, which headline might you see in the MSM?
A. "Home values rise by 5%!"
B. "Homes sales increase by 2.7%!"
or
C. "Home prices in "Free-Fall"! -- DOWN 6.2% in one month!"
Hmmmm...
"Lies, d@#m lies and statistics"...
(1) Rumors, (2)the Euro is now the cause of many economic problems across Europe and will lead to its case by case abandonment, probably beginning with Italy, followed by some of the new eastern EU states and when Britain goes back to the pound the Euro will be dead.
Bump for reference. Housing prices around here are dropping. So, I don't know exactly what's going on. Seems like a LOT of people have stakes on which way this thing goes. The first casualty of war (any type of war) is ... truth... isn't it?
Britain kept the pound and did not switch to the Euro when Britain joined the EU, and in fact at today's close of US trading, the British pound was worth $1.8918.
You are right, I had forgotten that.
PLEASE NOTE.
This is a drop in price, not necessarily value.
I know that you are fixated on gold and this supposed gigantic "housing bubble burst"; however, gold has slid, the housing market is REGIONAL, and the market and the economy are strong. There are NO significators that prove any of your positions or statements.
But then, you buy gold on margin, with credit cards. LOL
LOL
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.