S&P: 3Q home prices fall by 4.5 percent

http://news.yahoo.com/s/ap/20071127/ap_on_bi_ge/home_price_index;_ylt=Atbjav2ke_0XDmhC1hdxvnKyBhIF ^ | 11-27-07

[central_va]

Computers, when adjusted for inflation and quality, have been in a defaltionary spiral- forever. That's an example.

I don't think houses are priced sanely, they are artificially high due to speculation only. That is bad and deflation in this case would be good, both socially and economically.

[RockinRight]

Long-term, sure...short term...no.

You’re right about the pricing being largely due to speculation and for that there will be a correction. But it won’t happen in a vacuum.

[RobRoy]

>>In 12 months the speculators will be out and another 20 year cycle will start like the last two I remember.
You want to bet on that? LOL<<

I certainly would not want to, ‘specially with the implications of the chart in this article: http://seekingalpha.com/article/51466-the-worst-is-yet-to-come-for-housing?source=d_email

[ex-Texan]

You know what I think is bonkers? Let me rephrase that: 'Do you know what I believe is totally insane?' --

The fact that U.S. stock are going up today on news that CitiCorp just got a $ 6.5 Billion bailout by Abu Dhabi!

That is freaking leaping-into-the-fire insanity. Wall Street is being bought up right and left by wealthy Arabs from the United Arab Emirates. And Bush's good friends -- the spoiled Saudi princes. And nobody gives a damn. Nobody even cares.

Stupid, greedy Wall Street bankers cheer Bernanke devalues the U.S. dollar. And greedy stock brokers urge more suckers risk their life savings on pie in the sky. Even your mom and pop's money market accounts have been infected. Oh, well . . .

All caused by easy credit and out of control mortgage lending . . . Even hair cutters and nail buffers got into the act:

Click the image to learn more. Scroll down.

[RockinRight]

OK that sign is funny and an example of a boom gone bad.

While many points you’ve made over the years have some truth to them, you talk as if you’d PREFER the Dow tank to 2000, housing values plummet 90%, 50% of Americans would be unemployed, all so you can sit there smug and say you were right.

[Gritty]

Wall Street is being bought up right and left by wealthy Arabs from the United Arab Emirates

Maybe this is a good thing?

As our stock market craters, their hordes of electronic oil dollars will be reduced precipitously - just like the Japanese lost their overhang of dollars in the real estate bust of the '80s. As the companies go out of business or lose 90% of their value, they are left holding the bag - just like the dot.com bust of 2000.

This actually may be a clever move by our Fed to destroy these trillions of dollars accumulated by the rubes in foreign countries who sold us oil and cheap electronics at scandalous prices. We're just "redeeming" them without working for them.

Clever, that Uncle Sam...

[ex-Texan]

You are just joking -- right?

If not -- please take a peek here:

http://www.freerepublic.com/focus/f-news/1931177/posts?page=28#28

[Gritty]

You are just joking -- right?

Right.

[RipSawyer]

That’s a big decrease in net spendable income in the consumer economy when you spread it out over the millions of people who would be selling their homes and putting that money back into the economy one way or another,

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

And a big decrease in cost for the buyers, which leaves them with more income to spend on other things or invest. Net to the economy, zero. A house is a house of course, of course and those who thought that a big increase in housing prices represented an increase in real wealth were only fooling themselves.

[RockinRight]

A house is a house of course, of course and those who thought that a big increase in housing prices represented an increase in real wealth were only fooling themselves.

Isn't that a horse is a horse?

All kidding aside, you're correct, but that doesn't mean it doesn't have an effect anyway.

The economy overall will be OK. All I was pointing out is the reason that it's more of a concern than a change in the price of gas or milk is because we're not dealing with $3 here or there, we're talking tens (or hundreds) of thousands of dollars.

[RipSawyer]

You understand it but some folks on this forum seem to believe that a drop in housing prices mean that that much actual real wealth has disappeared into some black hole. I probably thought that way myself at one time.

[M. Espinola]

That photo indicates the state of the economy.

[SeaHawkFan]

My home in Los Angeles went up 120% in the last 5 years. If it drops 50% I’m still doing well. In 12 months the speculators will be out and another 20 year cycle will start like the last two I remember.

Are you sure? A 100% gain is the same number of dollars as a later 50% drop. A 50% drop leaves you with only a 10% gain over the five years.

Maybe you meant to say that if you lost 50% of the five year gain, you'd still be doing well.