Posted on 11/26/2009 3:36:51 AM PST by Kartographer
A fifth-straight monthly gain for the Case-Shiller Index Tuesday and Monday's stronger-than-expected existing home sales report is giving renewed hope to the housing bulls.
"Disregard them," says Barry Ritholtz, CEO of Fusion IQ, who notes the existing home sales number was juiced by sales of cheap condos and various government programs. Meanwhile, the Case-Shiller results were below expectations.
(Excerpt) Read more at finance.yahoo.com ...
Isn’t it funny how the housing numbers on both ends are somehow up, sales as well as foreclosures...
“Isn’t it funny how the housing numbers on both ends are somehow up, sales as well as foreclosures...”
Great point. I think it is a big stetch to think that people will run out and start buying houses after having the hell scared out of them. I think it is much more likely they will replace their cars first, particularly when many were purchased with leases that are set to expire.
Bump for later.
An erosion of trust in the law has evaporated trust in our banking and credit system. Our system relies upon legal documentation to know who owns what and how much it is worth.
That is gone due to derivatives and the sequestration of debt by the Fed.
Two house went up for sale (within last 6 months) on my block, sold within 2 month for more than the owners paid for them.
location, location, location. (not below sea level, within 40 miles of employing areas, no crack houses nearby.)
There used to be a few FReepers that I would have arguments with. My claim was that equity is not wealth. They would counter with all kinds of claims to the contrary. I notice they don't come around much anymore.
Just closed on a short sale house. It sold for 223k in 07 I paid 147k.It has a new A/C, new roof shingles, new kitchen cabnets,new tile floor. Hope prices don,t go down too much more.
True. Ultimately housing prices are a function of income since homes are financed by mortgages which require a specific level of income to support. Unfortunately the future outlook for the level of wages and salaries in the United States is not good, even if the economy begins to generate new jobs.
It is likely new jobs will be at lower wages than the jobs eliminated from the economy over the past two years. If cap and trade legislation passes, expect the rest of US manufacturing jobs to go overseas, most likely to India and China the two nations who refuse to accept restrictions. The wages of those blue collar middle class jobs won’t be replaced in the service economy. Another issue is the white collar jobs eliminated in this recession. Many of those let go in their 50’s and 60’s are retiring at much reduced income levels and will not be coming back to work. Companies have learned that many of these functions can be accomplished by redistributing work or through technology. In cases where incremental headcount is needed, companies will hire younger workers at lower salaries to perform the function. I have observed one company where the CEO seems intent on lower payroll costs by using the current economic system to weed out gray haired middle management and replace the jobs with younger managers at a 20 to 50% reduction in pay. In addition there are hundreds of thousands of jobs in the financial sector that will not be coming back at all. The number of banks and other financial institutions is being reduced. The era of a branch bank at every major intersection is going away along with hundreds of thousands of middle class jobs. Finally, the boomers who remain employed will be retiring over the next decade, moving from job based income to living on savings. They will be trying to exit their large houses but there are fewer income earners coming up behind them to buy the inventory and those potential customers will have lower incomes. Expect demand to be soft for at least a decade as supply exceeds demand and the income levels don’t exist to support the mcmansion phenomenon of the last 20 years.
Taxation will be another factor dampening personal income. The federal government seems intent on dramatically increasing the level of taxation through direct increases in personal tax rates as well as through less overt levies (cap and trade, health care). State and local governments facing the exploding costs of public employee retirement programs will be increasing property tax rates and sales taxes. Higher taxes will mean less disposable income to allocate to housing.
With a rapidly declining manufacturing base, this country no longer has the ability to create the millions of middle class jobs needed to prop up the housing market. Over the long term the market responds to the laws of supply and demand. For the next few years demand is likely to remain low and supply high.
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We have too, too many government millionaires...
All true. Another big problem would be the elimination or reduction of the mortgage tax deduction which is always a possibility.
What is “jingle mail?”
What is “jingle mail?”
I think it’s got something to do with abandoning your house. Mail the keys to the “bank” and walk away.
I see it as very simple common sense that real estate prices have to fall until the average family can afford the average home. Any action to keep this from happening will fail and will only serve to lengthen the recovery.
I suspect after the 2010 election, if the Dems still control a majority in both houses there will be a mad rush to raise all sorts of taxes. Eliminating the mortgage deduction would be a logical place to start as on paper it would be a big money raiser.
Never going to happen. Between the NAR, MBA and middle class taxpayers it will be crushed.
The middle class will cut corporate and lower class welfare, but never their own.
It seems like they propose a tax or fee every day so it might not take that long.
Most of the sales I’ve seen in southern AZ are foreclosures...many gutted. Most are selling now at about 2/3 the price the banks tried to sell them for a year ago.
I just bought the empty lot next to me. 4 years ago, the owner wanted $196K. 1.5 years ago he offered to sell it to me at $70K. After it was bundled and sold to cover debt, the new owner offered it to me for NLT $47K. Our purchase price this month was 29K - which is more than it is worth, except it affects whether I continue to live in my current house.
196K - 70K - 47K - 29K...and still overpriced to sell to anyone else.
1 acre lot. Paved road. All utilities. Surrounding homes current value around 300K. And if I was willing to wait, I could probably have bought it for 20K.
What a great housing market! Just up, up, and away! Just ask the MSM!
I finally came up with an analogy to what our recession-recovery plan is (i.e., inflate housing).
Let’s say every morning, you wake up, beat up your wife, go to work. And work is fine, no problems, the boss likes you...nothing to complain about. Then you finally feel a bit guilty, so one morning you stop beating up your wife. Then work turns ugly, people don’t like you, your boss is nasty etc. What should you do to fix work? Simple, go back to beating up your wife every morning.
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