Posted on 07/26/2011 9:30:43 AM PDT by Free Vulcan
WASHINGTON (MarketWatch) Sales of new single-family homes fell 1.0% in June as purchases in the Northeast dropped to the lowest level since the government began tracking the data in 1973.
Single-family sales fell last month to an annual rate of 312,000, the Commerce Department said Tuesday. Economists surveyed by MarketWatch had expected sales to climb to an annual rate of 325,000 on a seasonally adjusted basis.
Sales for May were revised slightly lower to an annual rate of 315,000.
Sales of single-family homes sank 15.8% in the Northeast and 12.7% in the West. The Midwest saw sales climb 9.5% while sales in the South rose 3.4%.
(Excerpt) Read more at marketwatch.com ...
U.S. home prices rise for second month in May http://www.marketwatch.com/story/us-home-prices-rise-for-second-month-in-may-2011-07-26
The most telling piece of data is that new home units available for sale were only 164K, the lowest on record. Nothing is being built, which ripples into construction and home supply. There's a large inventory of homes that are selling at a poor pace in general.
The govt says prices rose 5.8% but the Case-Schiller report is saying .1%. I tend to believe the latter. Basically the housing market is near dead and not improving.
Let’s try this again:
U.S. home prices rise for second month in May
http://www.marketwatch.com/story/us-home-prices-rise-for-second-month-in-may-2011-07-26
What happened to the word “unexpected” in the headline? lol
How’s the National Socialists of Realtors going to spin this to make it sound ABSOLUTELY wonderful?
I don’t think we’ve seen the bubble burst yet. We’ve seen a mini-burst. Banks are still holding foreclosed properties and not sending them to auction, nor are they negotiating on the prices of those properties.
Many foreclosed houses are sitting feral here in the Chicago area, with no buyers, because the appraisals of the homes do not come close to what the banks want for them. Because of that, even if folks wanted them (and they don’t, at the current asking prices) it is hard for folks to secure credit for them.
I’ve heard many reasons why the banks are doing this, but eventually, those bank assets are going to have to be reconciled on the books to reflect fair market value, not wishful thinking value, and those homes are going to have to be sold off, or tore down. Communities are not continue to support abandoned homes. They pose a danger to the community at worst, and drive down the value of nearby homes at best.
Once banks are forced to release these properties at fair market value (which is going to be a fraction of the note, as many of these homes have suffered a good amount of damage), I think you are going to see a major correction in property values as these properties jack up the supply, while there is still not a lot of demand.
Even with cash, this is still not a buyers market, unless one were to speculate on huge Weimar type inflation. I don’t think we’ve reached that point yet, but it may be coming.
I really think that’s why the Fed printed all that money and a great deal of it wound up as bank reserves. They are worried that the housing crash isn’t over, and they don’t want mass bank insolvencies due to massive downgrades in portfolio values and rising rates if we don’t get the debt problem under control.
You make a good point - some of these feral homes are pushing 4 years old and getting to the point where they aren’t new and are or will soon be in need of repair, further pulling prices down. And with banks barely willing to lend, no one will be buying any of these homes even if they are cheap. Even if the banks were, no one has a good enough job or job at all to float any kind of mortgage. So we are in a vicious cycle with no end in sight.
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