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A Record Drop In Home Prices
Washington Post ^ | October 26, 2006 | Kirstin Downey

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 ...


TOPICS: Business/Economy
KEYWORDS: bubble; bubblebrigade; depression; despair; doom; frbubbleheads; gggsalesman; goldsalesman; miserytonight; realestate; tinfoil
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To: bruinbirdman
In addition to liquidity, the US is the best place to invest because we have the best combination of political stability (DU notwithstanding) and relatively strong economic growth. As a foreign investor, you have three basic choices: 1) you can invest in the US & Canada (Canada's economy is closely integrated with the US economy and vice versa), which have very good political stability and fairly rapid economic growth, 2) you can invest in Europe or Japan, which have good political stability but slow economic growth, or 3) you can invest in developing countries such as China, India, Russia, Brazil, South Korea, and Mexico, which have strong economic growth but can throw you a nasty surprise from their less predictable political systems. For the typical foreign investor, the US and Canada are the best place to invest. More aggressive investors will make some limited investments in the developing countries.

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.

51 posted on 10/26/2006 3:26:40 PM PDT by defenderSD (Blogging from a secure, undisclosed location in the southwestern United States.)
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To: MrShoop

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"...


52 posted on 10/26/2006 3:35:53 PM PDT by pfony1
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To: GodGunsGuts

(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.


53 posted on 10/26/2006 3:39:50 PM PDT by Wuli
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To: pfony1
The housing stats separate out single family homes and condominiums. I'm not sure what you are trying to argue, that a lower number of sales inherently pushes an average one direction? That is clearly wrong.
54 posted on 10/26/2006 6:32:36 PM PDT by MrShoop
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To: GodGunsGuts

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?


55 posted on 10/26/2006 6:36:37 PM PDT by MeneMeneTekelUpharsin (Freedom is the freedom to discipline yourself so others don't have to do it for you.)
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To: Wuli

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.


56 posted on 10/26/2006 7:16:59 PM PDT by defenderSD (Blogging from a secure, undisclosed location in the southwestern United States.)
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To: defenderSD

You are right, I had forgotten that.


57 posted on 10/26/2006 7:37:39 PM PDT by Wuli
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To: GodGunsGuts

PLEASE NOTE.

This is a drop in price, not necessarily value.


58 posted on 10/26/2006 7:39:05 PM PDT by lawdude (The dems see Wal-Mart as a bigger threat to the US than muslim terrorists)
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To: GodGunsGuts
Just because YOU are bleeding, doesn't mean that others are, nor that they shall do.

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

59 posted on 10/26/2006 9:07:23 PM PDT by nopardons
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To: Mase

LOL


60 posted on 10/26/2006 9:08:26 PM PDT by nopardons
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To: Mase
Sorry that I'm a late for the party, but when you pinged me, I was not on line, since I was in the midst of a VERY important, somewhat secret conference call, the news about which is going to make a gigantic impact on our markets, in February. And yes, part of it was about what we have previously talked about, but the news that is to come out next February, is something NEW! :-)
61 posted on 10/26/2006 9:11:20 PM PDT by nopardons
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To: GodGunsGuts

Not nearly as good as a seat on the NYSE! :-)


62 posted on 10/26/2006 9:13:07 PM PDT by nopardons
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To: GodGunsGuts

HORSEFEATHERS !


63 posted on 10/26/2006 9:14:27 PM PDT by nopardons
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To: Mase

bttt


64 posted on 10/26/2006 9:18:45 PM PDT by nopardons
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To: GodGunsGuts

However the tax-valuations are still up.


65 posted on 10/26/2006 9:21:35 PM PDT by Doctor Stochastic (Vegetabilisch = chaotisch ist der Charakter der Modernen. - Friedrich Schlegel)
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To: defenderSD

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.


66 posted on 10/26/2006 9:34:17 PM PDT by GodGunsGuts
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To: Mase; djf; ex-Texan

67 posted on 10/26/2006 9:40:41 PM PDT by GodGunsGuts
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To: GodGunsGuts

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. :)


68 posted on 10/26/2006 9:46:16 PM PDT by Chena ("I'm not young enough to know everything." (Oscar Wilde))
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To: GodGunsGuts

Bookmarking. Thanks for the post, GodGunsGuts.


69 posted on 10/26/2006 9:47:06 PM PDT by Chena ("I'm not young enough to know everything." (Oscar Wilde))
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To: 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...

;-)


70 posted on 10/26/2006 9:49:09 PM PDT by djf (I'm not ISLAMOPHOBIC, just BOMBOPHOBIC!! Whether that's the same is up to Islam!!!)
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To: Mase
You are a purveyor of Keynesian cradle to grave debt dogma. People like you are the cause of doom and gloom. I simply report the effects of the disastrous policies you and your fellow debt-mongers advocate.
71 posted on 10/26/2006 9:52:40 PM PDT by GodGunsGuts
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To: GodGunsGuts
Well it's all a matter of how far housing prices will correct. I think it will be a fairly modest correction of 0-20% depending on the location, and typically about 5% to 9% off the peak from last year. Migration patterns play a big role in this kind of correction: last I heard about a month ago, existing home prices were up 7% in the Phoenix area in the last 12 months and that's because there's a steady flow of Americans moving into Arizona every month. The Midwest and the northern plains are going to have a bigger correction because people are moving out of there.

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.

72 posted on 10/26/2006 9:52:51 PM PDT by defenderSD (Blogging from a secure, undisclosed location in the southwestern United States.)
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To: djf

Like a backed up septic tank...


73 posted on 10/26/2006 9:55:33 PM PDT by GodGunsGuts
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To: GodGunsGuts
Like a backed up septic tank...
74 posted on 10/26/2006 9:57:25 PM PDT by Petronski (CNN is an insidiously treasonous, enemy propaganda organ.)
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To: defenderSD
I disagree with your position on illegals, but I would rather debate the issue than be rude about it. The people I'm talking about travel in packs and use ridicule and ad hominem to goad their opponents into loosing their cool (and hope they will suffer the consequences of the same). Notice I never go hunting for them on their posts. I also completely disrespect the fact that all they ever seem to do is sucker punch those who are honest enough to state a position, while never actually stating a position of their own.
75 posted on 10/26/2006 10:10:01 PM PDT by GodGunsGuts
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To: defenderSD
I think you defined almost perfect liquidity.

yitbos

76 posted on 10/26/2006 10:15:53 PM PDT by bruinbirdman ("Those who control language control minds. " - Ayn Rand)
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To: GodGunsGuts

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.


77 posted on 10/26/2006 10:15:53 PM PDT by djf (I'm not ISLAMOPHOBIC, just BOMBOPHOBIC!! Whether that's the same is up to Islam!!!)
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To: Petronski; ex-Texan
Your low-down tactic of sliming a fellow FReeper's website pretty much puts you in the same category as those who deface private property with graffiti IMO. And besides, why are you addressing it to me? If you are going to slime ex-Texan's website, you should be addressing your miserable comments to ex-Texan.
78 posted on 10/26/2006 10:25:22 PM PDT by GodGunsGuts
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To: djf

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.


79 posted on 10/26/2006 10:31:22 PM PDT by GodGunsGuts
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To: Chena

Aint that the truth! Thanks for the great reply--GGG


80 posted on 10/26/2006 10:39:34 PM PDT by GodGunsGuts
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To: GodGunsGuts

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.


81 posted on 10/26/2006 10:40:07 PM PDT by djf (I'm not ISLAMOPHOBIC, just BOMBOPHOBIC!! Whether that's the same is up to Islam!!!)
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To: defenderSD
Good show. My house has doubled in six years here in So. NV. A 20% hit is nothing, especially to a retiree with no intentions of selling. It looks good as realestate asset allocation in the portfolio.

All Hail to the Hills of Westwood.

PS - Sold house in Orange County to move to NV, 2000.

yitbos

82 posted on 10/26/2006 10:41:40 PM PDT by bruinbirdman ("Those who control language control minds. " - Ayn Rand)
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To: GodGunsGuts

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.


83 posted on 10/26/2006 10:45:00 PM PDT by Pelham (A Nation of Guest Workers)
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To: bruinbirdman

84 posted on 10/26/2006 10:47:02 PM PDT by defenderSD (Blogging from a secure, undisclosed location in the southwestern United States.)
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To: djf

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.


85 posted on 10/26/2006 10:54:34 PM PDT by GodGunsGuts
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To: Pelham

It could be no other way! LOL


86 posted on 10/26/2006 10:57:04 PM PDT by GodGunsGuts
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To: nopardons

Tell us what you read about bubbles again. We need some humor.


87 posted on 10/26/2006 11:03:28 PM PDT by Pelham (A Nation of Guest Workers)
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To: GodGunsGuts
The Euro will collapse before the US dollar in any scenario.
88 posted on 10/26/2006 11:06:27 PM PDT by John Lenin
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To: Pelham; djf; ex-Texan; durasell; RobRoy

Check out this website. Pay particular attention to the panic buttons on the right:

http://www.condoflip.com/


89 posted on 10/26/2006 11:08:16 PM PDT by GodGunsGuts
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To: John Lenin

In the long run, all fiat currencies are distined for the ash-heap of history IMHO.


90 posted on 10/26/2006 11:15:07 PM PDT by GodGunsGuts
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To: GodGunsGuts

E-commerce. Gotta luv it!

These days, you can lose your azz at the speed of light!!


91 posted on 10/26/2006 11:15:42 PM PDT by djf (I'm not ISLAMOPHOBIC, just BOMBOPHOBIC!! Whether that's the same is up to Islam!!!)
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To: GodGunsGuts
strangely, that chart also cooresponds to the offshoring of American manufacturing and production. big uptick in the 80s when we tried to bring back American pride.

thank goodness for globalization /sarc

92 posted on 10/27/2006 12:23:44 AM PDT by sten
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To: GodGunsGuts

In the long run, we're all dead... What's our point?


93 posted on 10/27/2006 3:13:10 AM PDT by Fan of Fiat
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To: GodGunsGuts

WOW.

I just checked my home price on zillow and it showing that my home price went up over the last 2 weeks.


94 posted on 10/27/2006 3:15:45 AM PDT by roaddog727 (BullS##t does not get bridges built)
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To: Mase; GodGunsGuts
That's ok, If prices decline and I have to move, I can always rent instead of selling.
95 posted on 10/27/2006 5:06:30 AM PDT by Fan of Fiat
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To: MrShoop

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":



Average Sales Price in August =

([3 x $1,000,000] + [70 x $100,000]) / (3 + 70) =

($3,000,000 + $7,000,000) / 73 =

$10,000,000 / 73 = $136,986.30


Average Sales Price in September =

([2 x $1,050,000] + [73 x $105,000]) / (2 + 73) =

($2,100,000 + $7,665,000) / 75 =

$9,765,000 / 75 = $130,200.00


$130,200 is less than $136,986.30



Do we agree on this point now?





96 posted on 10/27/2006 6:41:05 AM PDT by pfony1
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To: djf
Tell us another story about pawn shops paying you more than your silver is worth. That's always a funny one.
97 posted on 10/27/2006 7:25:41 AM PDT by Toddsterpatriot (Goldbugs, immune to logic and allergic to facts. You know who you are.)
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To: Toddsterpatriot

I never said that, twit.

Find it and present it to us or keep your pathetic mouth shut.


98 posted on 10/27/2006 7:32:33 AM PDT by djf (I'm not ISLAMOPHOBIC, just BOMBOPHOBIC!! Whether that's the same is up to Islam!!!)
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To: djf
I've walked into pawn shops and bought things just as I'm speaking about. And in fact, they gave me a premium.

Here you go, twit

99 posted on 10/27/2006 7:36:18 AM PDT by Toddsterpatriot (Goldbugs, immune to logic and allergic to facts. You know who you are.)
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To: sten

"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.

http://thehousingbubbleblog.com/


100 posted on 10/27/2006 7:43:32 AM PDT by ByDesign
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