Nobody in their right mind would buy a home this year
The government bribe was short lived. Now the bottom falls out. What happens when houses drop 30% in price as the economy gets deeper into depression? Housing sales grind to a halt
Many believe we are be on the edge of a depression. Everyone with assets in stocks or CD's is taking a bath, like seniors or anyone living off their investments. Property value is devalued so fast that mortgage companies are panicing. Most people employed are worried about next week, than the next, and next. Most manufacturers still in business are not collecting money, with 32 hour weeks. The government continues to feed off tax revenues from the bottom 1/3 of the taxpayers, except those on the free ride of welfare. With 30 million on UB where is that old tax base coming from?
I disagree,you saw the low, that number will bounce from the last report. I work 50 plus hrs per week, interest rates are at an all time low which offsets prices, houses are averaging 1 month on the market in my area, and my realtor said there are no signs of a slowdown. Were sales pulled forward by the tax credit? sure they were, but what's 8k back on a 500k house? Nothing!
Cash buyers are swooping up everything under 365k, why? Cause they can rent it out for the same price it takes to own it. The population is growing and will eventually push demand up. The only thing that can cause a real setback from here is interest rates rising and tax breaks on interest being taken away.
I have been house hunting for almost a year now, it's frustrating as hell because I have had that same bearish outlook as you and read all the same reports but for whatever reason it's not playing out like that in my area. Bottom line is, I can buy a house for the same cost as renting one, that's the math and that's all that matters.
Lev, although I can appreciate your point of view, you must look at what the real numbers are saying. The recovery is fizzling. Housing is headed down lower. I am glad you are happy with your home, but you could have waited and gotten a much deeper discount. I also should have waited. Its a tough thing to admit, buts it true. The houses we just bought will be worth 25% less a year from now. I feel like such an idiot
Lev, I work in Orange County. You better check with your real estate office again. Home prices are plunging. Do not look at last months data, look at the newest home data issued at the end of last month. This is a dire situation now. I would be happy to post some trade info with stats here if you like. I agree that there was an uptick in most areas over the last 14 months, but this is unlikely to continue as confidence withers. We were very hopeful even last month, but that hope is gone.
So what if you think you can own for the same price as renting...that does not preclude future price declines in real estate and your principal will be gone.
Housing is still far to pricey relative to income and as the delationary scenario continues to play out, and more and more people lose their jobs the current home prices will look sky high in 2 more years.
Interest rates will rise sooner or later as well...how long can the govt sucker China and other nations into buying our debt for little or no interest?
That house you are talking about for $365k.......how much was it 3 years ago........probably around $550k??? Well it will be under $300k in 2 or 2.5 years. Rent a nice house for your wife and baby, and keep your cash either liquid or in some energy mlp's with high yields and sell calls for extra income.
Housing will definitely follow the economy, and the economy is headed IN ONLY ONE DIRECTION LONGER TERM!
Even if 20% of the people are unemployed that means that 80% are gainfully employed. Most people do not follow the economy as closely as the people on the stock message boards. Most are just happily living their lives as usual. I meet people all the time who feel totally secure in their jobs and like to brag about it.
Baby boomers are going to want to work for the rest of their lives, but age discrimination in the workplace begins at 40-years old. If the government was smart, they would offer incentives to businesses to hire baby boomers with more money the older the worker. But, the government is stupid.