Posted on 11/20/2006 9:47:58 PM PST by GodGunsGuts
AP Home Sales Plummet in 38 States in 3Q
Monday November 20
By Lauren Villagran, AP Business Writer
Third-Quarter Home Sales Plummet in 38 States During the Summer; Home Prices Also Tumble
NEW YORK (AP) -- The feeble U.S. housing market showed more frailty when third-quarter home sales plummeted in 38 states, hitting Nevada, Arizona, Florida and California particularly hard, government data showed on Monday.
The once-booming real estate market's persistent weakness over the past year has reined in expectations for economic growth but hasn't been severe enough to offset a rising stock market, lower gas prices and improved consumer expectations.
The National Association of Realtors reported Monday that sales of existing homes fell in 38 states during the summer. Sales retreated to a seasonally adjusted annual rate of 6.27 million units nationwide, down by 12.7 percent from the same period a year ago. Nevada, Arizona, Florida and California led the declines.
Home prices also dropped: The realtors' survey showed that the midpoint price for an existing home sold during the summer dipped 1.2 percent year over year to $224,900. Some 45 metropolitan areas saw home prices decline.
Meanwhile, the latest report of building permits showed the slowest pace of annual growth in nine years in October. Housing construction slid sharply as builders tried to curb swelling inventories of unsold new and existing homes.
Stuart Hoffman, chief economist at PNC Financial Services Group, said he thinks the housing market still hasn't reached its low point.
"I think the permits numbers point to yet another flight of stairs down on housing before we hit the basement," he said. "On the other side, stocks are rising, consumer confidence is good and jobs are rising. Those factors are keeping this decline in housing contained."
A closely watched indicator of future economic activity release Monday provided further evidence of that trend.
The Conference Board, an industry-backed research group based in New York, reported Monday that its Index of Leading Economic Indicators rose 0.2 percent in October. Increased real money supply and improved consumer expectations helped offset the sharp decline in housing permits and weaker vendor performance.
"The economy is growing more slowly, but we have yet to have weakness spread beyond housing and motor vehicles to such a degree that we need to fear the proximity of a hard landing," said John Lonski, chief economist of Moody's Investor Service, referring to when the economy turns from growth to a recession.
The housing market slowdown has weighed on the leading indicators index this year. But all told, strengths and weaknesses in the leading indicators have been roughly balanced, according to the Conference Board report. The index stood at 138.3 versus 139.1 in January -- its peak so far this year. The index has declined four of the last seven months.
The Conference Board's labor economist, Ken Goldstein, said the October index suggests "the economy is unlikely either to reheat or to get significantly cooler."
"Instead, the kind of slow growth now being experienced could continue right through the winter and into the spring," Goldstein said.
In another sign of moderating economic growth, the Federal Reserve held its benchmark interest rate steady last month at 5.25 percent for the third straight session. The Fed had raised interest rates 17 times beginning in June 2004 to stave off inflation, before halting its campaign of credit-tightening in August.
Not when it comes to your silly and pointless posts.
"Stagflation" isn't disagreeing. "Stagflation" means stagnant GDP growth coinciding with currency devaluation (also known as "inflation").
Which will make my "bets" rise in value.
With a single law change mandating that holders of notes notify home-owners that their own home's mortgage is being sold at a discount, and a provision that the home-owner has the right to strip that note from a Pooled package and buy it, an entirely new buyer can be introduced into the Market.
All of a sudden you are paying your (now discounted 15%) home mortgage payment to your own 401k because your 401k just bought your note when your lender tried to sell it at a discount.
The old days are gone. The excuse that "it's too complicated" to allow a home-owner to buy his own note out of a package of pooled notes is moot in the age of the computer.
What home-owner would turn down the chance to get 15% (some notes are being discounted even more) off of their mortgage principle?!
Yet most home-owners today don't even know that their lender is trying to sell their mortgage, much less at a 10 to 15% discount.
So you shift your 401k from stocks into real-estate (or you get your parents to help out or otherwise raise the money to buy your mortgage note)...your real-estate. Big deal. Your note was being sold at a discount, why shouldn't you benefit instead of some financial institution?!
All assets rise in value when you have inflation. Your "bets" aren't special/clever/unique.
You are right, they are not clever, they're obvious.
If you think that it is obvious that real estate (an "asset") is going to rise in value, then yes, your bets are obvious.
Wow! 1.2%... The sky is falling. The stock market goes up and down more than that in a day.
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True, but the housing market is full of short sellers right now and prices are going down with no buyers. Also, consumers don't take loans out on their stocks to buy cars and Christmas presents with, but they do refinance their one real asset with adjustable rate mortgages that turn their "asset" into an instant liability. The economy will most likely go into recession in '07 and the stock market will be the first casualty. I am not guaranteeing this scenario, but it just seems the most likely given all the data. Can you give me a rosier picture? (smile)
They have fallen. A two-bedroom apartment in a decent neighborhood is down to $3 million.
They are unique....when you leverage credit card cash advance checks 5 to 1, paying 9.9% interest and 3% commission and bid/ask spread for every round trip. And monthly storage fees.
I think uniquely expensive is a better description.
How do you sell housing short?
That's why Gigi's got to be lying. No one is that stupid, imho.
Don't sell Gigi short.
He must think housing will continue to appreciate in the face of rapidly falling sales and backed up inventories. Obviously, he's a genius.
>>You would think they did away with these stories now the Democrats have taken over. <<
Maybe, just maybe, they are not politically motivated as so many assumed.
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