Skip to comments.A Record Drop In Home Prices
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 ...
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:
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
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%!"
C. "Home prices in "Free-Fall"! -- DOWN 6.2% in one month!"
"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.
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
Not nearly as good as a seat on the NYSE! :-)
However the tax-valuations are still up.
I post on all sorts of subjects. But I have decided to focus my attention on the housing market and gold so I can point and laugh at all the hyenas who have made it their policy to gang up, harass, ridicule and intimidate anyone who dares to disagree with them. In short, I'll stop posting about these topics once these phonies have been shown to be the charlatans they really are.
Bookmark. (Gold has done very well for this family. We've bought it, mined it ourselves, and are keeping a watchful eye on it.)
To those gold "duds" out there who may want to argue with me, don't bother. You have your opinions, we have ours. Personally, our opinion has been a good thing for us. :)
Bookmarking. Thanks for the post, GodGunsGuts.
Hey! According to Toadster, that can't possibly be true!
So I feel safe and can sleep at night, especially since his wisdom just keeps overflowing...
I don't think anybody is saying prices will not correct back down and give back some of the gains of the last few years, but the real estate optimists at FR are not expecting a big financial crisis from real estate. Some people have been a little nasty with you and I'd like to see them tone down their language, but that's the way it is on the internet. I've been yelled at a few times for arguing against deportation of illegal immigrants who are working and who are not criminals.
Like a backed up septic tank...
They rarely use facts to back up their positions. I'm inclined to think they do cheerleading shift work at some financial institutions.
Remember, the dollar long ago ceased being a thing of substance. Now it's just promises. Promises of more dollars.
Think about it.
If it was a private group trying to pull it off, it would be the biggest confidence game in the world.
And the conservative thing to do is to point out the policies that have been undermining the dollar, while at the same time advocate policies that will help remedy the same. The problem with the hyena pack is that they not only refuse to recognize that the dollar is being undermined, they actually encourage it.
Aint that the truth! Thanks for the great reply--GGG
The only thing holding up the dollar is an almost universal acceptance of it as a token of exchange.
If there is any kind of move away from that paradigm, it will plummet. Whether it plummets against other currencies or commodities is irrelevant.
All Hail to the Hills of Westwood.
PS - Sold house in Orange County to move to NV, 2000.
That can't be. Real estate only goes up.
In SoCal condos and $1 million properties aren't moving but sellers don't appear too eager to lower their expectations. Greed is still in the drivers seat and Fear will just have to wait its turn.
You are absolutely correct. But as more and more countries begin to diversify their currency reserves, the dollar will fall further and further out of favor. Just look at all the countries that are considering the Euro.
It could be no other way! LOL
Tell us what you read about bubbles again. We need some humor.
Check out this website. Pay particular attention to the panic buttons on the right:
In the long run, all fiat currencies are distined for the ash-heap of history IMHO.
E-commerce. Gotta luv it!
These days, you can lose your azz at the speed of light!!
thank goodness for globalization /sarc
In the long run, we're all dead... What's our point?
I just checked my home price on zillow and it showing that my home price went up over the last 2 weeks.
I agree with you that changing the NUMBER of non-identical figures that are used to compute an "average" does not give any clue regarding whether that "average" will increase, decrease or remain the same.
But, actually, that was not my point.
The example I used took "assumed" statistics from two consecutive months and showed:
(1) an INCREASE in the "total number" of homes sold (from 73 to 75).
(2) an INCREASE in the "unit prices" of those homes ("McMansion" prices go from $1,000,000 to $1,050,000 and "Townhouse" prices go from $100,000 to $105,000) and
(3) a CHANGE in the "mix" of houses sold (McMansion sales were three out of the total of seventy-three sales in August and two of the total of seventy-five sales in September)
The example then showed that, in spite of the price increases from August to September and in spite of an increase in the total number of homes sold from August to September, there was a DECREASE in the "average price" of homes sold in September, relative to August.
Therefore, the example showed that the decrease in "average price" was SOLELY the result of the change in the "mix" of houses sold in September, relative to August.
That was my point, and I have trouble believing that you do not understand this common-sense conclusion.
But, if it is true that you still don't understand it, let's see if the algebraic formulas presented below will help you "get it":
I never said that, twit.
Find it and present it to us or keep your pathetic mouth shut.
"The folks that can afford early retirement are already moving. Look for prices to increase in the south and southwest, especially states with no state income tax (texas, florida, nevada)"
There may be no income tax in Florida, but you obviously havent been following the insurance fiasco there, that alone will empty grandma and granpa's retirement savings in short order.
Thinking like this, at this point in time, is wishful thinking. Inventory is skyrocketing in most areas, houses are not selling and sitting on the market for months, the only news is that builders have slashed prices, and destroyed comps in that area for anyone who's bought in the last coupel of years. These retirees are going to find moving to warmer climates tough if they can't sell their houses, especially if they refied any equity out of their homes, or converted to a toxic loan, or upgraded to a bigger McMansion and it's worth less than what they paid.
Not mention, much of new housing is completely fails to fit the needs of retireees, 3000 square foot McMansions with stairs, enormous upkeep and energy bills is no way to go on a fixed income.
If the market sours, like it probably will, expect retirees to NOT retire, or stay right where they are, until the market bottoms out, and prices return to reasonable levels...and if they did'nt indulge in the insanity of the last couple years, then maybe they can buy an overpriced condo for pennies on the dollar.