I see it as a correction, and return of sanity to the housing market
Despite what people are told, home values don’t go up $100k in a month.
Borrowing against inflated speculated increase in home value is moronic.
Rates are still unnaturally low to try and keep home prices iflated, which will make the crash worse.
Obama should never have give rebates for home sales. He should have let the market self correct. If home values crash, it is because the market has spoken. If people get upside, screw em. The correction would have brought values down to levels that would make them more affordable to more people without retarded federal incentives.
And lastly, not everyone is capable or should own a home. That’s a fact. That twink Barney Fwank needs to get that through his head.
Low prices and rates can’t slow fall in home sales
Low mortgage rates and prices fail to stop home sales from sinking to weakest in 15 years
Alan Zibel and J.W. Elphinstone, AP Real Estate Writers, On Tuesday August 24, 2010, 4:54 pm EDT
WASHINGTON (AP) – Home prices in many parts of the country scream bargain, and mortgage rates haven’t been this low for decades. So why are houses across the nation sitting on the market for so long?
This is something of a correction but you have to factor in there has already been something of a correction with the plummeting values/equity (on the order of 25-50% depending on market) that already existed. This is something of a double whammy and is indicative of a real problem. Plummeting value is bad enough, but if actual sales drop despite the falling prices (supply/demand) than there is genuine cause for alarm as values/prices will drop even further.
Barney Frank has gone on the record saying Fannie/Freddie should go away and has actually admitted exactly what you said about people getting into mortgages they had no ability to pay.
While Freddie/Fannie are to blame, and the government just made things worse, you can’t attribute the slump to them alone. A big part of it is the economy. People are seemingly afraid to spend money and are starting to be conservative about their spending.
First and foremost, homes are only going to sell while people want to buy them, regardless of the prices of housing and interest rates. The housing market will dictate the prices, but only a feeling of financial security can sell them. Few people manage their finances well enough to confidently buy a home in this economy and they’re starting to realize this.
A huge shift in the way Americans view money, homes, televisions, cars, government spending and pretty much everything else is needed to fix what both parties and the central bank have created.
People buying homes they couldn’t afford is a symptom of the problem, not the problem itself. There are no real savings in this country, so interest rates must be higher than what the fed has artificially kept them at for decades. The market only allows for low interest rates when savings are high.
People must also quit buying homes expecting to make money off of them. Buying a home is an investment because when you own it, you no longer have to pay rent…it shouldn’t be because inflation and huge amounts of non existent credit continually drive prices higher and higher without a ceiling.
Prices will drop significantly to accommodate the higher interest rates, so just as many people will be able to buy homes, they will simply have a larger incentive to purchase one they can afford. Large down payments(from savings,) and higher interest rates are what will in fact make owning a home within the grasp of more people.
Credit should be used to make legitimate capital investments…things that will actually produce capital. Factories, mines, and research come to mind. Entirely too many people exist in service industries…many of them need to lose their jobs. Too many brokers and retailers, not enough farmers and miners so to speak.
I’m not convinced that anything short of allowing America to become a total wasteland owned by China and every third world nation in the world will wake us up to what we have sown. I hope that’s not the case, but I’m not filled with optimism.
Looking at real estate in the vegas valley, $200k can buy what $800k did in 07
If you paid $800k for my future home, don’t come scratching my car, I wasn’t the dumb ass who didn’t look at the numbers before buying my $800k house that was $600k overpriced for the area.
And your $600k of “equity” is a bs number that you’re agent sold you on, not me
its a great time to buy anywhere. we bought our first about 2 years ago… uhg.
kills me to see what stuff is going for now… if we’d waited 2 more years, we’d have a pretty nice spread outside of town for what we paid for this place.
The only house I know specifics on is the one we’re buying and the one we currently live in. I can tell you the last time it sold to a private buyer, 2/06, was for double what we’re paying and it didn’t have a pool at that time. On top of that, the house was built in 04’, a company purchased it a few months ago and gutted her from stem to stern and has had everything replaced to include 18" tile, hard wood floors, crown moulding, new kitchen with cherry cabinets and all new appliances, etc.
Our current house has lost approx 35% from it’s brand new price when I purchased it 6 years ago. The real Las Vegas market, which I’ve been actively involved in, is actually starting to pick back up, albeit slowly.
All I see is dems trying to scare people, blaming Republicans, and lying about us being in some sort of recovery.
You think people will learn that government getting its mitts into everything doesn’t turn out so well? Nope. We’ll keep on trucking with the same ole gov knows best, and can control the economy approach we’ve been on for decades. Gov has been pushing low interest huge loans to anyone with a pulse, and they are still doing it. Gov spending didn’t end the Great Depression, either, and yet I see the polls still say 45% of the people are going to vote democrat. Not that the republicans have it right, either, but for fucks sake people. They put us on the dole for over a trillion dollars in “stimulus”, and the U6 number is no better than it was a year ago. How stupid can people be? Yeah lets vote for people who are going to raise taxes, spend even more, and have no clue what they are doing other than lying and spending money. Lets keep pumping people into houses so we can have another rash of people who can’t afford them buying 200k “investments”. Yeah hows that “investment” working out now?
This is going to be a repeat of the 30’s. Even after FDR’s spending, New Deal, etc…unemployment in 1940 was still over 10%. But the dems taut FDR as some sort of Saint who ended the Great Depression. Unemployment numbers didn’t stabilize until we were knee deep in WW2. It took FDR, and his economics (which the dems are trying to emulate- see John Kerry saying we need a New Deal 2) almost a decade to cut the 25% unemployment rate in half. But oh know we are too stupid to realize it didn’t work back then, there is no reason to believe it will work now. Like I said the U6 numbers are almost identical to what it was a year ago. But yeah we’re in a “Summer of Recovery”…:rolleyes:
Maybe not a collapse but it’s a major indicator on how the economic is doing and a huge phsyological blow to the markets. Home sales aren’t just about individuals buying a home it’s also about building, materials and jobs.
In other words this is another indication that we are far from being out of the woods regardless of what Biden, Obama or Gibbs try and tell us.
However, I don’t blame them entirely for this mess. Everyone from Uncle Sam, to mortgage companies, banks, realitors, buyers and sellers are to blame. We are going through a period of correction but it’s going to be very painful for a long time.
We are counting our blessings. We had a full price offer on our house in less than a month and closed within two. Actually bought by the doctor replacing my wife in the practice. The only downside was we expected, and planned, for the house to be on the market much longer and signed a rental agreement on a house in our new location a week before the offer came. So, we have to wait to buy a house until spring. Hopefully it will still be a buyer’s market; I think it will.
We began the interviewing process in our new location approx. a year ago and we started looking at houses. In the interval, we have seen the same houses still on the market and prices continually falling across the board. The real estate agents bragged about the stability in the market in our location but reality has finally hit here as well. I really do feel for those that have to sell right now; it’s brutal.
we had a huge recession in 1920 it was over by 1922. The history books ignore this because the govt did nothing, this wouldve refuted Keynesian economics, and the system was purged. Then in 1929 there was huge govt meddling, guess what happened, we got a Great Depression.
Historians are going to have to think up a new name for the Great Depression.
Returning to the prices of 15 years ago isn’t a correct, it’s a disaster.
You buy a house (during normal times) you expect it to be worth more than what you paid within 7 years.
Now if prices simply returned to “pre boom” prices of 5 years ago that would be a correction.
What we have is a disaster.
And it is the result of “Get rich quick assholes” who think because they installed a granite countertop and gave everything a coat of paint that they were entitled to profits of $100k or more on a flip.
On the upside, if you have money (because you won’t get a loan anymore) it is a great time to buy a house.
People buy and sell houses when they move due to new jobs or job transfers.
Corporations that offer housing buyouts during transfers don’t want to transfer people right now because they don’t want to get stuck with houses.
And people don’t want to move for jobs because they are afraid of losing the the new job.
Last time I moved was in 2001. Started a job one month before 9/11 in the aircraft engine industry. Guess what happened to all the new hires? Yep, we were out the door. I still owned my old house at that point. No job, two payments. I closed on the old house by the end of the year, and found a new job in January.
The move prior to that was in late 2000 with a company I had been working for since 1994. By April 2001 I was out of work.
So my mantra is “never again”. I’m not moving for a new job or transfer without a guaranty of future employment for at least 2 years, unless I absolutely have to. When you get a relocation package, you usually have to work two years or you owe the relocation money back (or a pro-rated amount), and they make you sign an agreement stating this. If they’ve got me for two years, then it’s only fair that I’ve got them for 2 years.
there are far more houses than buyers, prices have to tank. Prices wouldnt have gotten this high without the Fed pumping cheap money into the system to bid up prices. Far too many houses were built than what a true free market wouldve allowed.
Withdrawl/recession sucks but thats the only way to get healthy. The problem is the high/boom not the correction.
its a horrid time to buy a house, I dont see how anyone thinks its a good time. Prices will continue to tank, and will tank when govt stops injecting the housing market with heroin.
30 year fixed at 4.25% and home prices are 1/2 what they were a few years ago. I’m hoping to close on the 1st.
