http://www.breitbart.com/news/2005/11/29/D8E6C6M83.html
More good economic news 🙂
Liberals, feel free to turn this into a negative.
More good economic news 🙂
Liberals, feel free to turn this into a negative.
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New Homes Sales up 13% in October from September
- Thread starter ntdz
- Start date
Starbuck1975
Lifer
There is little question that a housing bubble exists in this country. The market dynamics are simply too conclusive to suggest otherwise.
In the last few years, under low interest rates and high risk negative amortization loans, people have been buying homes well beyond their means. In high demand markets, the cost of homes far outweigh the ability of the average American working family to afford them. In SoCal, outside of high crime areas, the average cost of a starter home is around 700k...that is a housing bubble if ever there was one.
The recent trend in hot markets is house flipping...going into homes with these high risk loans, and then flipping them for a profit before the loan rates increase beyond affordability. Not only does this create a highly unstable financial foundation, but it has created an environment where many Americans are not building equity in their homes, or even moving towards ownership...many of these loans are essentially no different then paying rent...with the banks and other finance agencies owning it all.
Most market analysts agree that this recent boost in home ownership is the result of people rushing into the market under the reality of rising interest rates...locking in loans before interest rates make home ownership unaffordable.
Also, recent trends suggest that in inflated housing markets, prices are starting to soften...this may not necessarily cause the housing bubble to burst, but these high risk loans under increasing interest rate conditions are certainly going to place many home buyers in the position of not being able to afford their homes anymore.
In the last few years, under low interest rates and high risk negative amortization loans, people have been buying homes well beyond their means. In high demand markets, the cost of homes far outweigh the ability of the average American working family to afford them. In SoCal, outside of high crime areas, the average cost of a starter home is around 700k...that is a housing bubble if ever there was one.
The recent trend in hot markets is house flipping...going into homes with these high risk loans, and then flipping them for a profit before the loan rates increase beyond affordability. Not only does this create a highly unstable financial foundation, but it has created an environment where many Americans are not building equity in their homes, or even moving towards ownership...many of these loans are essentially no different then paying rent...with the banks and other finance agencies owning it all.
Most market analysts agree that this recent boost in home ownership is the result of people rushing into the market under the reality of rising interest rates...locking in loans before interest rates make home ownership unaffordable.
Also, recent trends suggest that in inflated housing markets, prices are starting to soften...this may not necessarily cause the housing bubble to burst, but these high risk loans under increasing interest rate conditions are certainly going to place many home buyers in the position of not being able to afford their homes anymore.
azazyel
Diamond Member
I'm not an economist buy this is from the article...
"On Monday, the National Association of Realtors reported that sales of previously owned homes fell by a bigger-than-expected 2.7 percent in October. That decline followed a report that construction of new homes and apartments was down 5.6 percent in October as builders reduced building plans in the face of slowing demand.
Earlier this month, luxury home builder Toll Brothers cut its sales forecast for the coming year, citing delayed openings for new developments and weakened demand in several of its markets.
The report on existing homes said the inventory of unsold homes rose to a 19-year high in October, while Tuesday's report on new home sales said the inventory of unsold new homes hit a record in October. This inventory overhang is expected to depress price gains in coming months.
"
dmcowen674
No Lifer
The Country is starting to go into all out panic and you feel it is a good thing.
dmcowen674
No Lifer
Originally posted by: charrison
Originally posted by: dmcowen674
The Country is starting to go into all out panic and you feel it is a good thing.
Panic causes consumer confidence going up?
That's a bunch of fooey. High interest and inflation will hit the little people hard. The data is coming from those that have money and are running the show.
Originally posted by: dmcowen674
Originally posted by: charrison
Originally posted by: dmcowen674
The Country is starting to go into all out panic and you feel it is a good thing.
Panic causes consumer confidence going up?
That's a bunch of fooey. High interest and inflation will hit the little people hard. The data is coming from those that have money and are running the show.
Interest rates are still low and inflation is moderate. Not enough to induce the panic you want.
Tangerines
Senior member
Originally posted by: dmcowen674
Originally posted by: charrison
Originally posted by: dmcowen674
The Country is starting to go into all out panic and you feel it is a good thing.
Panic causes consumer confidence going up?
That's a bunch of fooey. High interest and inflation will hit the little people hard. The data is coming from those that have money and are running the show.
Don't like the stats? Tell us they're not real! Hooray for Dave's Reality!
drnickriviera
Platinum Member
http://www.marketwatch.com/news/story.a...01-A0BF686A184C%7D&siteid=google&dist=
It's "likely that [Tuesday's] report overstates the true pace of home sales because of well-known statistical deficiencies," said David Seiders, chief economist for the National Association of Home Builders.
Indeed, according to the Commerce Department, it's not certain that sales rose at all during October. The confidence interval for new-home sales was 17.7% in October, which means sales could have risen as much as 30.7% or fallen as much as 4.7% and still be within the normal range. The government says it takes six months to establish a new trend
Todd33
Diamond Member
On the News Hour an analysis of this 13% was that:
1. Small sample set that is often revised.
2. Not on closing numbers, but new sales contracts.
3. He said it will be revised down next month since the report is error prone and does not reflect the market.
He says the housing market is slowing. I think he is from the some national realitor group. This is neither good or bad news, it just is.
1. Small sample set that is often revised.
2. Not on closing numbers, but new sales contracts.
3. He said it will be revised down next month since the report is error prone and does not reflect the market.
He says the housing market is slowing. I think he is from the some national realitor group. This is neither good or bad news, it just is.
Originally posted by: AntaresVI
Originally posted by: dmcowen674
Originally posted by: charrison
Originally posted by: dmcowen674
The Country is starting to go into all out panic and you feel it is a good thing.
Panic causes consumer confidence going up?
That's a bunch of fooey. High interest and inflation will hit the little people hard. The data is coming from those that have money and are running the show.
Don't like the stats? Tell us they're not real! Hooray for Dave's Reality!
LOL.
Homes in my part of the country run at about 10 - 20% of that value. I had a friend of mine from Chicago look at a pic of my home (2 X 3 bedroom duplex) and she said it would easily go for 200k +, here it is worth about 85k (64k when I bought + 10k in improvements). The neighbors place runs about 75k and has been on the market since summer.
The Bubble will burst before too much longer and many people will find that they are upside down (owing more than they are worth) in their new homes.
LegendKiller
Lifer
The 2nd edition of Irrational Exuberance puts forth an interesting argument for a over heated market.
In the past 100 odd years houses have only increased ~70% after adjusting for inflation. ~40% of that is in the past 9 years. If one were to look at their index graph you would see that all components of housing have not increased as much. Furthermore, every time an increase like this would happen, there was a fall.
The feedback loop theory is pretty compelling and does lend credence to the theory that potential buyers are batshite crazy. Anybody who says otherwise is reliving 99/00 and will be nothing more than a whining little punk in a few years.
In the past 100 odd years houses have only increased ~70% after adjusting for inflation. ~40% of that is in the past 9 years. If one were to look at their index graph you would see that all components of housing have not increased as much. Furthermore, every time an increase like this would happen, there was a fall.
The feedback loop theory is pretty compelling and does lend credence to the theory that potential buyers are batshite crazy. Anybody who says otherwise is reliving 99/00 and will be nothing more than a whining little punk in a few years.
Thump553
Lifer
ntdz, if you actually read the article you linked you would certainly not be crowing this as good news. Your post brags about the headline and ignores the substance of the article you linked.
Anyone with any experience at all in the real estate market (at least here in the Northeast) will-regardless of political bent-tell you that the housing market at best has plateaued (if they are a rosy glasses optimist) or has started a period of decline. Inventories are building up rapidly and it has become a buyer's market. Toll Builders (the nation's largest builder of McMansions) has recently drastically revised its future sales way downwards.
It's one thing to trumpet your political agenda, it's quite another to distort the news to fit your speaking points.
Anyone with any experience at all in the real estate market (at least here in the Northeast) will-regardless of political bent-tell you that the housing market at best has plateaued (if they are a rosy glasses optimist) or has started a period of decline. Inventories are building up rapidly and it has become a buyer's market. Toll Builders (the nation's largest builder of McMansions) has recently drastically revised its future sales way downwards.
It's one thing to trumpet your political agenda, it's quite another to distort the news to fit your speaking points.
dmcowen674
No Lifer
Kudos for real reality :thumbsup:
Starbuck1975
Lifer
Care to provide evidence or data that supports your "panic" theory. The economy is hardly robust at the given moment, but many market indicators going into the holidays suggest a rise in consumer confidence...not a panic.