Posted on 06/13/2006 6:46:22 AM PDT by Hydroshock
Herb Weisbaum
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There’s no denying it any longer. In most parts of the country, the sizzling house market has cooled.
The latest numbers tell the story: Sales of existing homes are expected to drop 6.8 percent this year. The people who make their living selling homes prefer to put a more positive spin on these numbers. They say the marketplace is just going back to normal.
“It’s not normal to have 15 offers on a property,” says Jim Warkentin, a Realtor in McLean, Va. “That’s just crazy.” For the most part, those crazy days are gone.
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“It’s a tougher marketplace now,” says Joe Woodbury, a RE/MAX agent in Barrington, Ill. “The homes are really taking longer to sell."
That may be bad news for sellers, but it's good news for buyers. In many markets, buyers have the luxury of being able to take their time and negotiate a deal for the first time in recent memory.
(Excerpt) Read more at msnbc.msn.com ...
Ping
What is your motives to posting this crap all the time? I really don't understand fear-mongering bubble heads types who are terrified of everything. All you have ever posted are this. I really don't understand people consumed with such fear.
I report the truth and try to warn people of the coming storm.
bump
Hmmm... What is "Hydroshock's "motive"?
I think Freud would say that "Hydroshock" suffers from a neurotic delusion. "Hydroshock" thinks that HE is "smarter" than the real estate market and that HE is "smarter" than us home-owners, even though HE has completely missed the rising equity values that WE have enjoyed.
Rather than blame his own timidity for his economic losses, Hydroshock trolls the media, seeking evidence of a future apocalyptic "popping" of the real estate market.
Such an event would "prove" that "Hydroshock" is not as stupid as his actions suggest and would provide a form of "redemption" for his economic foolishness.
So I think it is his neurosis that drives him to post articles that support his self-glorifying delusion.
Just as it did last year...
And the year before....
And the year before...
As they say: "To err is human. To persist in error is neurotic."
If it's the truth you're really interested in please explain why each of the three property bear markets during the last 30 years (1974-75, 1980-82, 1990-92) occurred amidst falling interest rates, while the last great U.S. real estate market (1976-1980) occurred as the prime rate raced into the double digits. In 1976 the prime-lending rate rose from the single digits all the way to 19 percent by 1979 while real estate values took off. By 1979, the value of individually owned dwellings reached $1.3 trillion dollars, twice the worth of individually owned corporate stock. Half of all the new multimillionaires in 1978 earned their fortunes in real estate.
If rising interest rates will not kill the real estate market, what will? Inflation? Inflation is great for tangible assets like real estate. The only thing left is unemployment. In recent history, the greatest drops in real estate values came in markets with high rates of unemployment. Are you really predicting 8-10% nationwide unemployment anytime soon? What's your real motivation? Or, are you just a doomer?
Good article on housing market from MSNBC. Thank you Hyroshock for posting it.
Time to buy? Nope. Time to buy will probably be in about a year. ;)
I was figuring a year and a half myself.
It is not crap to people that are thinking of purchasing their first home. It is useful information to help them make a decision. It is only "crap" to those that have skin in the game.
As I've said a number of times, on any day go to Yahoo or Google news and search "foreclosures". The results are interesting. And it aint just Denver...
You are really not looking at the big picture, are you?
Very correct. I am tired of dealing with people who are so greedy they don't care who they hurt at any cost. Making a fair profit is one thing. Gouging folks is an entirely different matter.
I'm entering into a year lease beginning in August. I've seen rent remain stagnant for eight years (as long as I've been a renter) while home prices have over doubled in the Seattle suburbs.
And it isn't just prices that have gone up. The home I am leasing this time will cost me less than half per month than what it would cost to buy it.
That said, I had no idea that insane creative financing would create the kind of bubble we ended up with or I would have bought two years ago. It was a bad call on my part but it is way past too late to do anything about it now.
My post presented the big picture. Hydroshock can't explain it although he's been asked numerous times. Maybe you can? What's going to crush the real estate market if, historically, rising interest rates have not hurt property values? Inflation? Unemployment? Something else? Have at it.
It was a bad call on my part but it is way past too late to do anything about it now.
Yes, perhaps, but think of all those nights of sound sleep you had.
Interest rates are up, wages are not keeping up with them, prices are out of sight, and liquidity is drying up. The exotic loans that many have used to get houses are a house of cards. It is only a matter of time before it tumbles.
I think the problem is that some of them aren't gouging, they are looking at losing everything if the bubble really POPS. And some may actually be here on free republic.
For me it is not that important. I owned most of my adult life. We are empty nesters and now rent. we have incredible mobility and freedom, but we DO miss the tax deduction. But that is no reason to own your home. I will not let the government use the tax laws to manipulate my lifestyle.
So from my "unbiased" perspective, the only reason this thing didn't cool years ago (and when people like ex-texan started warning us) is due to the creative fincancing that staved off the inevitable - and wild speculation and flipping reminiscent of what was going on in the stock market back in 1929. The problem is, the longer you keep it at bay, the louder the pop will be when it happens.
What's going to crush the real estate market if, historically, rising interest rates have not hurt property values? Inflation? Unemployment? Something else? Have at it.
A)Higher interest rates add to the monthly payment. At present time -- if you believe there's a bubble -- then folks have reached the limit of what they can manage month to month. Historically low interest rates allowed for the purchase of more house than the average person would normally consider during times of more "traditional" interest rates. In short, they acquired "more house" than the next buyer will probably be able to reasonably afford.
B) The wacky loans have allowed folks to buy houses that they normally wouldn't be able to afford and drew a legion of flippers into the game. So, the potential exists for a ton of homes to flood the market via foreclosure and flippers abandoning the game. This is simple supply and demand. The more houses for sale, the lower the average price.
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