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(Marketwatch)   Existing home sales have largest monthly decline ever and fall to lowest level since 1995   (marketwatch.com) divider line 126
    More: Sad, pulses, Dow Jones Indexes, plunges, trade symbols, end of days, DAX, National Association of Realtors, tax credits  
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1772 clicks; posted to Business » on 24 Aug 2010 at 1:31 PM (4 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2010-08-24 11:17:06 AM  
So, my retirement nest egg I invested in a house in 2004 is kaput?
 
2010-08-24 11:25:17 AM  
WHY HASN'T MY HOME TRIPLED IN VALUE LIKE I WAS PROMISED?!
 
2010-08-24 11:28:00 AM  
Glad I'm not selling my house ever.
 
2010-08-24 11:28:37 AM  
The homebuyer bribe should be chalked up as another amazing stimulus success. Displace future demand to the past, trap more homeowners underwater (the fools that jumped in for the bribe and were bidding up home prices), and bribe the RE industry assholes that lobbied for this horrific waste of taxpayer dollars.

And of course, it gave homeowners that were tired of seeing their values drop the false hope that the "bottom" had occurred and the "bounce" was going to return them to bubble profit times. That's just cruel.
 
2010-08-24 11:41:40 AM  
It still amazes me how many people think the current housing market is an aberration, and if we just hold on long enough, the completely normal and unremarkable conditions of 12% per annum appreciation that prevailed from 2000-7 will return. Despite the fact that the US dramatically overbuilt and now has enough vacant residences to house the entire population of Britain, 17% of the workforce is out-of-work or nearly so, the government is starting to pull back its massive subsidies, and that housing prices are still elevated relative to long-term trends and income levels. Good luck with that.

A house is a place to live and a good hedge against inflation. That's it.
 
2010-08-24 11:46:24 AM  
Good. People should buy a house when they are financially stable and emotionally mature enough to settle down for a decent amount of time. Not because that is what is expected of them.

/I never really understood how bad the market was until I went to south Florida. I saw several housing developments that had been stopped mid way through construction. A couple of the houses had been painted halfway before work was halted.
 
2010-08-24 11:48:59 AM  
So this means there's no where to go but up?

Got a 3/2/1 that I'm almost finished fixing up. Down to kitchen cabinets, tile, carpet, trim and paint. Let's hope the upswing starts in a few weeks.
 
2010-08-24 11:49:22 AM  
SusanIvanova: It still amazes me how many people think the current housing market is an aberration, and if we just hold on long enough, the completely normal and unremarkable conditions of 12% per annum appreciation that prevailed from 2000-7 will return.

It doesn't amaze me. People just ignore the market numbers and repeat what the retards in the RE say. "It's a buyer's market. Things are turning around. Etc."

Fact is that despite the wide spread analysis and lessons learned from the housing bubble, people still think that houses are "on sale" and that we're on the verge of a massive rebound. We live in the stupidest country on Earth.
 
2010-08-24 11:53:34 AM  
Why are expected and necessary market corrections "sad"??
 
2010-08-24 11:55:14 AM  
I think this was predicted by many armchair economists/politicians.
 
2010-08-24 11:55:23 AM  
BigGary_: So this means there's no where to go but up?

No.


Got a 3/2/1 that I'm almost finished fixing up. Down to kitchen cabinets, tile, carpet, trim and paint. Let's hope the upswing starts in a few weeks.


So long as you aren't expecting to make any money off the house, you should be fine.
 
2010-08-24 11:56:35 AM  
wolvernova: It doesn't amaze me. People just ignore the market numbers and repeat what the retards in the RE say. "It's a buyer's market. Things are turning around. Etc."

Realtors aren't retards. They have a vested interest in lying about market conditions to keep that spark of "owning a house is free money, so I should move heaven and earth to buy the most expensive one I qualify for!" idiocy alive. They're lying bastards, not stupid bastards. People who listen to the NAR are retards.
 
2010-08-24 11:56:44 AM  
SusanIvanova: now has enough vacant residences to house the entire population of Britain

citation please:)
 
2010-08-24 11:57:00 AM  
I still see houses being built. It's not like there aren't plenty empty ones for sale already.

.
 
2010-08-24 11:58:34 AM  
Kirk's_Toupee: I think this was predicted by many armchair economists/politicians.

It was predicted by pretty much everyone who didn't have a vested interest in keeping alive the fantasy that housing prices would continue to climb unabated at 12% per year.
 
2010-08-24 12:01:09 PM  
I guess some areas of the country are doing better than others...

Houston is holding up O.K. I thinl... Houses on my street have been selling. The people that moved in w/in the last ~5 years basically got out with within a few percent of what they paid. I built my house here in 1997, am sitting on loads of equity, and have no intention of moving anytime soon... cheers
 
2010-08-24 12:09:53 PM  
wjllope: Houston is holding up O.K. I thinl... Houses on my street have been selling. The people that moved in w/in the last ~5 years basically got out with within a few percent of what they paid. I built my house here in 1997, am sitting on loads of equity, and have no intention of moving anytime soon... cheers

Houston is doing better than most places because Houston didn't see the massive run-up in speculation and pricing that the rest of the nation has seen.

With that said, I wouldn't be too sure of exactly how much equity you have in your house. What your house is appraised for and what it will actually sell for are two different things. Even in Houston, there is a gap.
 
2010-08-24 12:18:16 PM  
SusanIvanova: Realtors aren't retards. They have a vested interest in lying about market conditions to keep that spark of "owning a house is free money, so I should move heaven and earth to buy the most expensive one I qualify for!" idiocy alive. They're lying bastards, not stupid bastards. People who listen to the NAR are retards.

I disagree. While they are lying in how they conduct themselves, it's more out of ignorance than ill intention. They're utterly uninformed about the housing market. It's the one thing they should understand, but the depth of their sophistication stops at "this is a buyers/sellers market". They are just really farking dumb. But that doesn't stop them from being lying bastards every second of the day either.

DistendedPendulusFrenulum: I still see houses being built. It's not like there aren't plenty empty ones for sale already.

Builders don't just close down and move into another line of business. They scale down, yet keep building. That doesn't mean they should, in terms of what's good for the economy, but they still have careers that they won't put on hold just to let supply/demand balance out. Frankly I am fine with this. Go ahead and add more inventory, it drives prices down.
 
2010-08-24 12:33:38 PM  
SchlingFocker: what it will actually sell for are two different things.

Judging that based on sales of homes in my neighborhood (and recently on my street) built by the same builder that built my home... My house is still sitting around 78-80 $ per square foot, which is quite a bit more than we paid (1997)... And, agreed, there's definitely a gap between appraisal value and possible sale price... We just had it reappraised when we refi'd (again - w00t!).... I actually like that gap - slightly lower property taxes! cheers
 
2010-08-24 12:53:38 PM  
So nobody has noticed the reason for the drop is that the tax credit went away? It did drop that much for a reason you know. That also says that government support is a good thing in situations like these. Tax away that little bit of help and the market nearly falls apart. Now imagine if we did that to the rest of the economy like the Republicans want.
 
2010-08-24 01:09:15 PM  
GAT_00: That also says that government support is a good thing in situations like these.

Actually it's the perfect argument for why the govt should NOT do something stupid like this. We just wasted $20-$30b of taxpayer money to temporarily prop up home prices and increase the number of will-be underwater homeowners. If you think this is in any way good policy, you're an idiot.
 
2010-08-24 01:11:10 PM  
good. maybe in a couple years when I'm ready to buy, I'll actually be able to afford a home.

/parents bought their townhouse in 2003, and yes, its gone up in value.
//stupid DC/MD/VA market.
 
2010-08-24 01:13:24 PM  
Why can't home prices go up 12%/yr forever? I mean, everyone's income is going up by at least that much, right?

/a resident of Washington state's "most unaffordable/overvalued" city.
 
2010-08-24 01:23:20 PM  
Kirk's_Toupee: citation please:)

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a0IfdN5GEvcQ

Granted, it's as of late 2008 (although if things have moved since then, it's towards more vacancies). 19 million units vacant. At 3 people to a unit, that's enough for the UK.
 
2010-08-24 01:24:44 PM  
wolvernova: SusanIvanova: Realtors aren't retards. They have a vested interest in lying about market conditions to keep that spark of "owning a house is free money, so I should move heaven and earth to buy the most expensive one I qualify for!" idiocy alive. They're lying bastards, not stupid bastards. People who listen to the NAR are retards.

I disagree. While they are lying in how they conduct themselves, it's more out of ignorance than ill intention. They're utterly uninformed about the housing market. It's the one thing they should understand, but the depth of their sophistication stops at "this is a buyers/sellers market". They are just really farking dumb. But that doesn't stop them from being lying bastards every second of the day either.


A lot of Realtors are middle-aged people that never went to college, because it is (was?) one of the few decent jobs someone without a college education could get.
 
2010-08-24 01:35:36 PM  
GAT_00: Tax away that little bit of help and the market nearly falls apart.

It's funny how people make it out to be the end of the world if housing prices drop.

When prices of every single other product out there in the U.S. drops, people cheer.

You should be glad if housing prices fall. A higher rate of home ownership (responsibly purchased, of course) is good for the country.
 
2010-08-24 01:37:46 PM  
It's a good thing we wasted a fortune giving $8,000 to people who mostly would have bought in a few months anyway.
 
2010-08-24 01:38:13 PM  
wolvernova: will-be underwater homeowners

Care to back that random assumption up?
 
2010-08-24 01:39:41 PM  
SchlingFocker: GAT_00: Tax away that little bit of help and the market nearly falls apart.

It's funny how people make it out to be the end of the world if housing prices drop.

When prices of every single other product out there in the U.S. drops, people cheer.

You should be glad if housing prices fall. A higher rate of home ownership (responsibly purchased, of course) is good for the country.


Except this was increasing home ownership, which has now badly fallen as soon as the program ended. So, your comment was really just confirming mine.
 
2010-08-24 01:42:47 PM  
SchlingFocker: A higher rate of home ownership (responsibly purchased, of course) is good for the country.

A less-mobile, heavily-indebted workforce is good for corporate America. This much is true.
 
2010-08-24 01:43:07 PM  
When people on fark are telling you to sell....Buy.
When people on fark are telling you to buy....Sell.

Most people on here complaining about sheeple are in fact the ones who are following the herd.
 
2010-08-24 01:44:36 PM  
GAT_00: Except this was increasing home ownership, which has now badly fallen as soon as the program ended.

No, it was propping up housing prices.

If the tax credit hadn't been implemented, the housing prices would have fallen sooner, and those same people would be buying the houses at the lower price.

Home-buying took a dip when the program ended, until the housing prices adjusted downward to accurately reflect the market. Now, buying will increase with the lower housing prices.
 
2010-08-24 01:47:15 PM  
wolvernova

Case-Shiller Composite 20 hit a local minima of 140.81 in May of 2009. As of May of 2010 (last number available) it hit 147.33. If we attribute all that rise to the $8k bribe, that is a 4.63% increase. $8k is 4.63% of $172k. Im not sure what the average housing price in the composite 20 cities is, but that is probably in the ballpark.

Not to slam on you, because you are dead on right 99% of the time in these threads, but just another point of evidence towards my claim that the subsidy only increased prices in the amount of the subsidy.

Which is still too farking much. But there isnt evidence for your $8k subsidy drives up prices $30k theory.
 
2010-08-24 01:48:43 PM  
GAT_00

Care to back that random assumption up?

Subsidy drives prices up by $8k. You buy with subsidy. Subsidy ends, prices drop $8k. Congratulations, you are now underwater (assuming you had less than $8k in equity to start with).
 
2010-08-24 01:54:02 PM  
fuzzwell: Glad I'm not selling my house ever.

I'm not planning on selling right now. But, several of my neighbors are 70+. They won't be around forever. Hopefully there's enough housing market recovery that they sell to families (again, I don't really care the price) and aren't long-term vacant holes or slumlorded off.
 
2010-08-24 01:55:43 PM  
Teknowaffle: /I never really understood how bad the market was until I went to south Florida. I saw several housing developments that had been stopped mid way through construction. A couple of the houses had been painted halfway before work was halted.

That's what half of the PDX metro area looks like today. Empty foundations, half-complete homes, overgrown plots...
 
kab
2010-08-24 01:57:16 PM  
Good. Getting there, keep it up.
 
2010-08-24 01:58:00 PM  
GAT_00: wolvernova: will-be underwater homeowners

Care to back that random assumption up?


It's pretty obvious. Government propped home prices up. Government prop ends, home prices go back down. When home prices fall, existing homeowners are paying for lower or negative equity. They default at a higher rate, and we continue what was started before the government blew $20b-$30b on a program that yielded no sustainable gain. We pushed off the problem, didn't solve it, and added to the growing problem of government debt.
 
2010-08-24 01:58:29 PM  
SusanIvanova

wolvernova:



Related? Similar names and you share a hatred of Relators.
 
2010-08-24 02:00:57 PM  
GAT_00: wolvernova: will-be underwater homeowners

Care to back that random assumption up?


Yes I will, though a couple of thoughtful minutes and you could have figured it out on your own. Or perhaps not.

So let's just say that 1 million people were not going to buy had the credit/bribe not been offered. They would have bought a year or two or five down the road. With 8k dangling in front of their faces, they jumped into the market. This spurred bidding wars. Saw it in my own neighborhood, prices jumping 30, 40, 50 thousand. Home prices shot up right when the credit started, so it's at least an amazing coincidence if not an outright cause/effect. All of those temporary gains will be erased, in addition to whatever decrease prices would have seen had demand not been temporarily manipulated. So now those one million morons that would still be renting or living with their parents are self-congratulatory homeowners... until the market unwinds from the mini-bubble and they end up underwater. We paid tens of billions of dollars to worsen the situation.

This is a textbook example of what constitutes very bad economic policy.
 
2010-08-24 02:03:20 PM  
wjllope: I guess some areas of the country are doing better than others...

Houston is holding up O.K. I thinl... Houses on my street have been selling. The people that moved in w/in the last ~5 years basically got out with within a few percent of what they paid. I built my house here in 1997, am sitting on loads of equity, and have no intention of moving anytime soon... cheers


The vast majority of the oversupply is in four states - CA, NV, AZ, and FL. For the rest of the country, supply/demand is in better balance. New household creation and housing obsolescence will get rid of any oversupply in the next couple years.

Housing prices/growth won't and shouldn't return to boom levels but should at least stabilize and grow with inflation in the other 46 states in the near term.
 
2010-08-24 02:06:08 PM  
wolvernova

With 8k dangling in front of their faces, they jumped into the market. This spurred bidding wars. Saw it in my own neighborhood, prices jumping 30, 40, 50 thousand.

See my post. I prebuttaled you. :)

Oh, and in response to a comment in that post, national median is $166k, so real close to that 172 number. However, prices are a bit higher in the Composite 20 cities, so 4.63% may be more than 8k, but not a lot more.
 
2010-08-24 02:09:54 PM  
wolvernova: GAT_00: wolvernova: will-be underwater homeowners

Care to back that random assumption up?

Yes I will, though a couple of thoughtful minutes and you could have figured it out on your own. Or perhaps not.

So let's just say that 1 million people were not going to buy had the credit/bribe not been offered. They would have bought a year or two or five down the road. With 8k dangling in front of their faces, they jumped into the market. This spurred bidding wars. Saw it in my own neighborhood, prices jumping 30, 40, 50 thousand. Home prices shot up right when the credit started, so it's at least an amazing coincidence if not an outright cause/effect. All of those temporary gains will be erased, in addition to whatever decrease prices would have seen had demand not been temporarily manipulated. So now those one million morons that would still be renting or living with their parents are self-congratulatory homeowners... until the market unwinds from the mini-bubble and they end up underwater. We paid tens of billions of dollars to worsen the situation.

This is a textbook example of what constitutes very bad economic policy.


You are overstating the impact. As Tjos has stated, $8k should increase prices by $8k. If prices in your neighborhood were jumping 30, 40 thousand then there might be circumstances specific to those houses.

The stimulus was intended to stop the bleeding of the housing market at its most vulnerable time. If prices do continue to decline now, the thought was that the economy and financial sector is in better shape now to handle the decline - which it indisputably is, compared to last spring.

On balance I agree that it probably wasn't a worthwhile program, because it transferred a windfall of cash from taxpayers to homesellers and banks. Whether the benefit obtained was worth it remains to be seen. It didn't make the problem worse, however.
 
2010-08-24 02:10:08 PM  
Debeo Summa Credo

Housing prices/growth won't and shouldn't return to boom levels but should at least stabilize and grow with inflation in the other 46 states in the near term.

Yep. Most of the bubble is gone except in a few areas. Case Shiller actually starting rising again after May 2009, but I think most of that was due to the subsidy. No post May 2010 numbers are out yet, July/August will be interesting to see, but we have a few months before they are out. Nationally, we could still go down another 6-8% I think. but most of that is going to be in those states that are still 20% overpriced.
 
2010-08-24 02:11:08 PM  
Tjos Weel: wolvernova

Case-Shiller Composite 20 hit a local minima of 140.81 in May of 2009. As of May of 2010 (last number available) it hit 147.33. If we attribute all that rise to the $8k bribe, that is a 4.63% increase. $8k is 4.63% of $172k. Im not sure what the average housing price in the composite 20 cities is, but that is probably in the ballpark.

Not to slam on you, because you are dead on right 99% of the time in these threads, but just another point of evidence towards my claim that the subsidy only increased prices in the amount of the subsidy.

Which is still too farking much. But there isnt evidence for your $8k subsidy drives up prices $30k theory.


Well that argument is self-defeating if you look at different markets. In mine where prices went up something like 10% or $30k, it obviously didn't stop at $8k. If you look at areas like Las Vegas or Detroit where prices have fallen 5% or $10k, obviously people weren't bidding up the houses by $8k.

I still conclude that just like the housing bubble that preceded this mini-bubble, there is no "stop" on what people will consciously over-pay for a house. It's an absolute rarity that a first time buyer will even be sophisticated enough to narrowly target a house's market value price. Seller lists it, buyers bid against it. With a flurry of buyers rushing to get their credit and aided by self-serving realtors that wouldn't tell them if they were over-paying, $8k becomes nothing more than a token.

So no, that aggregate figure doesn't prove your point, it's just a coincidence. If it were representative of many or all markets, then you'd have a good point.
 
2010-08-24 02:14:45 PM  
Supply and Demand is hard!
 
2010-08-24 02:14:46 PM  
wolvernova


If you look at areas like Las Vegas or Detroit where prices have fallen 5% or $10k, obviously people weren't bidding up the houses by $8k.


That isnt at all obvious. Maybe prices would have fallen by 18k if the subsidy didnt exist (In Vegas, that wouldnt surprise me at all - in fact, I think it would have been expecte - and Detroit shouldnt be used at all, it is farked for completely unrelated reasons).
 
2010-08-24 02:16:06 PM  
wolvernova

So no, that aggregate figure doesn't prove your point, it's just a coincidence. If it were representative of many or all markets, then you'd have a good point.

WTF do you think an aggregate is? Looking at a composite of 20 cities is going to have much less local effects than looking at individual cities.
 
2010-08-24 02:17:39 PM  
wolvernova

I find it funny you call the logical result a "coincidence". You really have no faith in humanity do you?

I generally have no faith in any particular individual. But as a whole, they average out pretty good.
 
2010-08-24 02:18:54 PM  
jst3p: Related? Similar names and you share a hatred of Relators.

RE agents always come up in "least respected profession" polls. It's not a coincidence that two or a hundred people on Fark would hate those overpaid whores.

Debeo Summa Credo: You are overstating the impact. As Tjos has stated, $8k should increase prices by $8k. If prices in your neighborhood were jumping 30, 40 thousand then there might be circumstances specific to those houses.

Your and Tjos' implications are that people would stop bidding them above this $8k amount. But how would they know where that was? FFS, during the bubble people were paying $300k over what they should have been paying, yet had no farking idea. The notion that they know where this "fair market" value is with a manipulated source of demand is ludicrous. They could have been bidding houses up by $1k or $100k in my neighborhood, it doesn't matter either way. They're not knowingly doing it, they are just reacting like little gears in a big machine.

Debeo Summa Credo: The stimulus was intended to stop the bleeding of the housing market at its most vulnerable time inevitable correction of housing prices.

FTFY.

Anybody with a basic knowledge of economics knows this is incredibly stupid policy. There is no "stop the bleeding". That's a bullshiat metaphor used by idiotic congresscritters and lobbyists for the housing industry (the ones that pushed for this and were rewarded handsomely for it).

It's kicking the can down the road. Spending billions of dollars to temporarily reinflate the market, spread the pain, and delay the recovery. It's unjustifiable.

Debeo Summa Credo: Whether the benefit obtained was worth it remains to be seen. It didn't make the problem worse, however.

Maybe you should read TFA.
 
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