Posted on 05/17/2006 12:34:36 PM PDT by ex-Texan
Slowdown in residential building and home sales will be felt throughout the economy; weaker jobs and consumer spending expected
NEW YORK (CNNMoney.com) - You don't need to be in the market to buy or sell a home to be affected by the cooling housing market.
[Everybody studies home sales] * * * because the sector has lifted * * * consumer spending and economic activity.
This week has brought several new readings indicating that the super-heated real estate market of 2004 and 2005 is rapidly fading in the rearview mirror.
Housing starts and building permits were down sharply in April, and builder confidence is at its worst level in almost 12 years, according to an industry survey.
And the median price of existing home sales fell in the first quarter compared to the fourth quarter, and while prices were still up year-over-year, the pace of growth slowed.
Even if prices don't fall, even if there is no housing bubble about to pop, the cooling real estate market will be felt by many of those who may not be thinking about real estate prices.
"It's going to be very similar to the stock bubble, but even more so. Many who didn't own stock lost their job when the market plummeted," said Dean Baker, co-director of the Center for Economic and Policy Research, and one of those who believes housing prices have resulted in an asset bubble ripe for a correction.
"They might not be directly connected to the housing industry, but they could find themselves affected, even if they work at a factory, or at a local mall. A lot of people have been sustaining their consumption by borrowing against the rise in their home's equity. If that stops, it certainly has to slow consumption considerably."
(Excerpt) Read more at money.cnn.com ...
Is this the same money.cnn.com that has bemoaned the awful economy of the last 5 years, 3 months, and 27 days?
Here in the San Diego Area, they have been touting this on the radio, on TV, nd in the papers for 18 months. Houses reached a level (prices), but have started to go up again.
Sorry, they are the boys who cried "Wolf".
State home sales surge in 2006 (WI)
http://www.jsonline.com/story/index.aspx?id=424334
Well, that's the risk you run when you go with an ARM.
The 'greater fool theory' works wonders in real estate. Go figure.
It's what happens when interest rates raise.
Housing slows.
Ya don't need a f-ing m.b.a. to figure this stuff out there pal.
http://money.cnn.com/2004/08/26/news/economy/housing_bubble/index.htm
CNN has been wrong before....theyll be wrong again.
From Aug 04.....enjoy
A market slowdown is a good thing. Guess what also happens when prices keep going up 25%? Reassessment. All of those people who are still in their house ten or more years may have good equity on paper, but now their property/school taxes have gone up. In a stable market, the libs don't have as much leeway to "adjust to market prices."
But then again, we can only look at the downside and be depressed, right?
According to the WSJ, $2 Trillion of mortgage debt (about 25% of outstanding mortgage debt) will come up for an adjustment in 06-07. It is projected that 1-in-8 will default.
Not slowing down in my area, they can't build them fast enough, that's lead to increased (rediculous) prices on new and old, crap for the most part, houses.
You can get rich buying foreclosures. But wait until after November, 2007. Housing needs some shaking out. ContemptofCourt is right in post # 12.
My gf was flipping channels a few days ago and some reality show was on called "The housewives of orange county" that is supposed to show 5 wealthy females from Orange county area of California and dealing with their families/ kids / boyfriends.
All of them were in real estate, except one who sold insurance. One is a former 1980's playboy playmate who now is a realtor for million dollar homes.
I hope their is a massive real estate correction just because nothing would give me greater pleasure than to see these people go down in flames and booted out of their gated communities.
CNN has a vested interest in creating the illusion of a shaky real estate market and poor economy - its called the November elections. Stand by they will be selling more of this crap.
We're all gonna die! Run!
Why do you pound on this particular subject relentlessly week after week? Are you really a conservative or are you a democrat operative?
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