i can't imagine how the housing market/economy would be doing today if we didn't have to fight Terrorists and inflation AND the RATS... AND the MEDIA!!!There is no nation-wide housing bubble. There is in the words of Greenspan regional "irrational exhuberence" by those on the coasts and in growing metropolitan areas. These values skew the rest of the market. Is it possible that much of the inflated values in these areas appear to be people investing more money in housing after 9/11 rather traditional investing markets? Possibly. But very little housing values were affected in the typical suburbs. At most, they may have flattened a little, but no huge drop. Any dramatic drop in other areas typically involved communities where significant employers imploded (ie airlines) who were affected by 9/11. Which would behoove a state or major metro to spread their revenue sources broadly, so that not everyone in the nieghborhood is trying to dump their home.
Now they are saying this is MORE proof of a bubble. "Last hurrah", says AP.
i can't imagine how the housing market/economy would be doing today if we didn't have to fight Terrorists and inflation AND the RATS... AND the MEDIA!!!New Homes Sales May Signal Speculator Buying and Last Hurrah
Here are the new home sales numbers. "Sales of new homes soared at a record pace in October in what could be a last hurrah for the booming housing market. The Commerce Department said that sales of new single-family homes shot up by 13 percent last month, the biggest one-month gain in more than 12 years."
"The increase confounded analysts who had been predicting that new home sales would decline by 1.8 percent. The rise in new home sales was accompanied by an increase in prices, with the median price increasing by 1.6 percent from September to $231,300 in October."
"The concern of some economists is that the booming housing market could have a bigger downturn, with sales and prices plummeting in the nation's hottest markets. The worry is that activity in recent years has been pumped up by investors buying homes and condominiums in hopes of quick gains. If they suddenly decide to dump those properties, it could cause a glut on the market that would further depress prices."
Some of the details from the Commerce Department report suggest speculative buying. Of the 111,000 new homes sold in October, 46,000 haven't been started and 40,000 are under construction. Only 26,000 homes sold were completed, even though 105,000 new homes were completed and for sale at the end of September. Totals don't add up due to rounding.
There were 501,000 homes for sale at the end of October, which is a new record I believe. That's compared to 431,000 at the end of 2004 and 371,000 a the end of 2003. The 'not started' segment was at 102,000 compared to 68,000 in December 2004 and 51,000 at the end of 2003. The number of homes 'under construction' stood at 293,000, whereas numbers for the past two years ending were 260,000 in 2004 and 236,000 in 2003.
The bubble that keeps on giving.
I think part of the new housing growth is due to people moving from high priced areas to lower priced areas. People who couldn't possibly afford a home in California and some metro areas have moved to more rural or lower cost cities. They have been taking their equity to these places and affording a home; bigger homes, cheaper in many cases.
I hope the bubble burst as well. It's just gone past healthy and into absurd and is being fueled by foreign investors. Coincidently many of these foreign investors come from countries in which Americans are not allowed to buy property.
Sad and ironic.
ping
There is also a ton of evidence that builders are doing everything they can to get people to close before the end of the year. In essence, these numbers are worthless.