Posted on 06/21/2011 8:42:26 AM PDT by tobyhill
Sales of existing homes fell in May, as severe weather and high gas prices weighed on the shaky housing market.
Home sales fell 3.8% to a seasonally adjusted annual rate of 4.81 million, down from a revised rate of 5 million in April, the National Association of Realtors said Tuesday.
Sales were more than 15% lower than in May 2010.
Economists had expected a May sales rate of 4.79 million existing homes, according to consensus estimates from Briefing.com.
"Spiking gasoline prices along with widespread severe weather hurt house shopping in April, leading to soft figures for actual closings in May," said NAR chief economist Lawrence Yun.
Gas prices surged earlier this year, pinching household budgets and putting a damper on consumer spending. In addition, sales were hurt by tornados and flooding in May that devastated parts of the South and Midwest.
Sales fell more than 6% in the South and were down over 5% in the Midwest. By contrast, sales fell 2.5% in the Northeast and were flat in the West.
(Excerpt) Read more at money.cnn.com ...
Here was a good one they said about Bush: “The DOW today crashed... through the 14000 barrier.”
I swear I heard that on the news. I bet they thought they were real cute in dressing that one up in black crepe.
Here in NJ, the housing prices aren’t the problem; the property taxes are. Potential buyers don’t like the idea of paying $15K in property taxes alone if they bought the house for cash tomorrow. Those of us who bought here have to suck it up; those who didn’t, won’t. As jobs flee to lower-tax environments, those who own homes are stuck with them, while those who are able follow the jobs.
FWIW, the same dynamic will explain why so few people in their early twenties now will ever have children later; they know the rug can be pulled out from under their feet at any time (as is happening everywhere now), and they don’t intend to be in the same position as us older folks.
Damned global warming has absolutely devastated the used housing market.
I remember the dotcom bubble, when every no-name startup would issue quarterly reports that "beat expectations by a penny." The suckers would buy, the stock would go up, and the burn rate continued.
For goodness sake its laughable how these guys numbers are always not even remotely accurate.
“When people get it through their heads that houses depreciate over time unless their money is losing it’s value faster,”
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Got into a big argument with a realtor lady once, she was ranting about how stupid it was to buy a mobile home because they don’t appreciate like a site built house. I told her there was no such thing as appreciation in a site built house, it depreciates too although maybe a little more slowly than a mobile home. She thought I was nuts until I laid out my case and then she agreed with me.
I think there is a word for this but I can’t recall it. Sometimes people have so much invested in a wrong belief that they simply cannot bear to even consider the possibility that they might be wrong. Liberalism really is a mental disease, it requires a person to completely deny reality. Their worldview has become a religion, not to be questioned. They will still be ranting about global warming, for instance, when the whole world is frozen...and it will be Bush’s fault.
You bring up some very pertinent and valid points. A big, big problem in the U.S. right now is that people have forgotten what it means to own property. Years ago, it was one’s own castle, or spot on earth. That was the value, not some “spin the wheel of house flipping and see if we get rich” scam that it is of late. As such, few care about their communities enough to build them up, resulting in a transient society.
I feel for those who are upside down, because they may not have known what was coming, although all the signs were there. My father’s late father’s rule (he’d be nearly 100 now and the rule was once a common adage) of thumb, was that anything over double one’s gross salary, is more than someone can afford a mortgage on. For over 100 years, that has held true (the most comprehensive study was a 116 year period from 1890 to 2006). Only in very recent years have existing homes been so high in price (and rising until the late 2000’s) that they were unaffordable in price to the common man, but manipulated through currency manipulation and easy credit.
I hope it was unintended, but whether or not, a big consequence to that bubble is the bankrupting of those in the middle class who were unfortunate enough to not see the signs. My parents, thankfully did in about 2003 and got out of the city while the getting was good. I feel bad for the innocent caught up in the fray, but pray they’ll teach their children that the biblical proverb is still true that truly the borrower is servant to the lender.
And as an end note, property taxes have got to go before we become even more of a fuedal system than we already are becoming.
I agree. That’s not even to mention the interest costs if not paid for outright. Depending on size and quality of both housing units, it’s quite possible that the interest alone on a site built home may pay for several mobile home replacements over a 30 year mortgage. To each his own, I suppose, as long as one can actually afford it.
For a long time a house was where you raised a family; as more people defer or avoid families altogether, that is removing the incentive to invest 30 years’ payments in a place when demographic changes after 30 months can be shocking.
At the same time, there are few people now who work a job that is not at risk of either 1) being sent overseas, or 2) having scabs imported to replace them. In this environment, houses are being lost by even the most prudent buyers. We are being reduced to serfs, and the elimination of private ownership of property is just one step; autos aren’t far off.
Obama continues with the destruction of the
Nation's wealth and savings.
Most of the claimed financial advantage of a site built house over a mobile home can be eliminated if you realize that they base the comparison on a site built house PLUS LOT against a mobile home MINUS LOT but bought with furnishings included in the price. The sales figures are based on selling the site built house PLUS LOT against selling the mobile home MINUS LOT to be moved off the lot. As I told the lady, if her home was sold to be moved off the lot it would not sell for as much as the mobile home would because the mobile home is designed to be moved if necessary, the site built house is not. I am not pushing mobile homes, I just hate to see people make absurd comparisons. Not even apples and oranges, more like watermelons and blueberries.
I’m trying to get out of the construction industry as we speak. It’s devastating.
You’re half correct: the parasite class will have children regardless of their prospects because we all pick up the tab for them and they’re satisfied raising them in government subsidized pig pens. Sadly, they’re raised with the values of their parents and the problem compounds itself. Meanwhile, responsible people delay child bearing because of severe economic uncertainty or lack of funds.
I still think a lot of those that voted for Obama in 2008 are either racists or idiots, usually they are both.
Cash buyers accounted for at least 30% of existing-home sales for the fifth-straight month in May. Cash buyers were 35% of buyers in March.
Think about that. Most of the cash buyers are investors seeking to turn the houses into rental units. The other 70% represents typical buyers using mortgages to obtain owner occupied houses.
The housing market is in a severe depression and there is no velocity in the market. People are reluctant to move from say, Detroit to Dallas for a job, because they cannot sell their house. People won't even move from Burleson TX to Plano TX, or Peachtree City GA to Alpharetta GA in the same metro area for a job, because the housing market is stuck. People need to be confident they can sell their current house before they can consider moving. And they may not be able to afford to 60 miles each way with gas at $4/gallon.
The only people benefiting from the low housing prices right now are current renters who have the down payment and the credit rating to be able to buy a house. And $20K-$30K in the bank and a credit score over 700 is not your typical renter.
Kinda like student loans. The government guarantees the loan...for life. Non-dischargable in bankruptcy. Thus you are a slave to the U.S. Dept of Education for the rest of your life. That is, until they raid your house for non-payment and shoot you and your dog.
I wonder how many of us could have actually worked our way through college without any loans if the government would have kept its nose out to begin with.
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