New Home Sales at Record Low

Off Topic Politics & World Issues
41

[quote]tedro wrote:

[quote]orion wrote:

[quote]SkyzykS wrote:
Hmmm…

I just signed the purchase agreement on a house, tomorrow is inspection and financing, closing at the end of March.

What do you all think of that?

[/quote]

I think you should lock in your mortgage and wait for inflation.

[/quote]

It’s funny how all the gold nuts ignore this point, and want things both ways. If mass inflation really is coming, it only makes sense to put your money into items with a high utility that don’t tend to depreciate. With interest rates also being this low, it makes the decision even easier. No where else but with a home mortgage does the average person have the leverage to seriously hedge against inflation.
[/quote]

Well, first you’ve got the demographic issue. Americans are aging as a group. Old people buy fewer new homes, except maybe retirement condos.

Secondly, mortgages are based on being able to make long term mortgage payments. How many people can do this anymore?

Finally, home ownership is right around its all time high on a % basis. If everyone has bought, there’s less people coming in.

There. There’s an argument and we didn’t even have that 4 letter word g##d in there. :wink:

42

[quote]Headhunter wrote:
Well, first you’ve got the demographic issue. Americans are aging as a group. Old people buy fewer new homes, except maybe retirement condos.
[/quote]
I can make this exact same arguement. Most old people already own a home. Since old people don’t tend to move or buy new homes, they are less likely to sell their current home, so we will see less homes on the market.

I think something like 7% of homeowners are behind on payments, which I admit is pretty high, but it leads me to believe that the answer to your question is about 93% of homeowners.

Actually it has dropped significantly recently and I think it’s getting close to leveling out. Without the first time homebuyer’s credits we very likely would have seen it level out already. American’s still have a strong desire to own their own house, we don’t need stimuli skewing the percentage that do.

Appreciated.

43

[quote]HG Thrower wrote:
Yet somehow my county assessor raised my assessed value and thus my property taxes. Assholes.[/quote]

Are you still in California? I thought they couldn’t raise your property tax in California or at least, only a marginal amount.

44

[quote]John S. wrote:

[quote]tedro wrote:

[quote]orion wrote:

[quote]SkyzykS wrote:
Hmmm…

I just signed the purchase agreement on a house, tomorrow is inspection and financing, closing at the end of March.

What do you all think of that?

[/quote]

I think you should lock in your mortgage and wait for inflation.

[/quote]

It’s funny how all the gold nuts ignore this point, and want things both ways. If mass inflation really is coming, it only makes sense to put your money into items with a high utility that don’t tend to depreciate. With interest rates also being this low, it makes the decision even easier. No where else but with a home mortgage does the average person have the leverage to seriously hedge against inflation.
[/quote]

Housing prices are still way to high, Housing I believe is one of the few areas where deflation will be felt, or at the very least it won’t keep up with inflation.[/quote]

Understandable, but…

I’m in Pittsburgh, where housing costs are approximately 30% lower than the national average.

So here is how my numbers play out. Maybe there is a flaw that I have not considered, but here goes.

The assessed value in 2005 was $79,500. Using the equation .70x=79500 puts the national avg. price at $113,571.

The purchase price will be $59,900, which is 52.7% of the national average for an equivalent property.

45

[quote]SkyzykS wrote:

[quote]John S. wrote:

[quote]tedro wrote:

[quote]orion wrote:

[quote]SkyzykS wrote:
Hmmm…

I just signed the purchase agreement on a house, tomorrow is inspection and financing, closing at the end of March.

What do you all think of that?

[/quote]

I think you should lock in your mortgage and wait for inflation.

[/quote]

It’s funny how all the gold nuts ignore this point, and want things both ways. If mass inflation really is coming, it only makes sense to put your money into items with a high utility that don’t tend to depreciate. With interest rates also being this low, it makes the decision even easier. No where else but with a home mortgage does the average person have the leverage to seriously hedge against inflation.
[/quote]

Housing prices are still way to high, Housing I believe is one of the few areas where deflation will be felt, or at the very least it won’t keep up with inflation.[/quote]

Understandable, but…

I’m in Pittsburgh, where housing costs are approximately 30% lower than the national average.

So here is how my numbers play out. Maybe there is a flaw that I have not considered, but here goes.

The assessed value in 2005 was $79,500. Using the equation .70x=79500 puts the national avg. price at $113,571.

The purchase price will be $59,900, which is 52.7% of the national average for an equivalent property.
[/quote]

One of the things that dogma cowboys often miss is that inside a market are hundreds of smaller markets.

California, Florida, Arizona, and Nevada are going to still go through a lot of pain. Parts of the Northeast will as well. But plenty of places are going to be fine, housing market wise.

46

It used to take 20% down to buy a home, about 20 years ago. It then became 10%, then 5%, and so on. This bubbled the price.

For a good estimate of home prices and what they really should be, just ask yourself: “How many people could put 20% down on this home.” – assuming we go back to pre-bubble prices.

Could you put up $80,000 in cash on a $400,000 house? Would you have to sell your current home and clear $80,000 to get that money? How likely are these things?

47

[quote]SkyzykS wrote:

Understandable, but…

I’m in Pittsburgh, where housing costs are approximately 30% lower than the national average.

So here is how my numbers play out. Maybe there is a flaw that I have not considered, but here goes.

The assessed value in 2005 was $79,500. Using the equation .70x=79500 puts the national avg. price at $113,571.

The purchase price will be $59,900, which is 52.7% of the national average for an equivalent property.
[/quote]

That looks like what a house should cost, still could get it for cheaper, but 60k for a house is a still really good.

48

[quote]on edge wrote:

[quote]HG Thrower wrote:
Yet somehow my county assessor raised my assessed value and thus my property taxes. Assholes.[/quote]

Are you still in California? I thought they couldn’t raise your property tax in California or at least, only a marginal amount.[/quote]

They did it somehow. I didn’t catch it until I got a notice that my escrow payments were going to increase, and at that point it was too late to contest the assesment. I’m going to have to fight it next year.

49

[quote]John S. wrote:
That looks like what a house should cost, still could get it for cheaper, but 60k for a house is a still really good.[/quote]

Yeah. The inspection turned out solid too. All of the utilities are new. The roof was put on last summer, and the construction type is cinder block with a sandstone fascade. That is very unusual. There wasn’t even any water in the basement, which around here is a foregone conclusion. A couple of gaskets in faucets need changed, but my brother is a master plumber and keeps stuff like that on hand in his truck.

There are others in the region for less, but none worth looking at twice. The ones that are worth looking at are getting snatched up in the blink of an eye. Closest one so far was at 48,5K , but as soon as it listed, it was gone in a cash deal. There have been 3 others that listed and were gone within 24 hours the same way.
The ones that aren’t worth looking at have blown out foundations, new thermo-twin windows, and some cosmetic improvements, but once you start putting a level on things and flipping switches, you run into problems.

50

[quote]SkyzykS wrote:

[quote]John S. wrote:
That looks like what a house should cost, still could get it for cheaper, but 60k for a house is a still really good.[/quote]

Yeah. The inspection turned out solid too. All of the utilities are new. The roof was put on last summer, and the construction type is cinder block with a sandstone fascade. That is very unusual. There wasn’t even any water in the basement, which around here is a foregone conclusion. A couple of gaskets in faucets need changed, but my brother is a master plumber and keeps stuff like that on hand in his truck.

There are others in the region for less, but none worth looking at twice. The ones that are worth looking at are getting snatched up in the blink of an eye. Closest one so far was at 48,5K , but as soon as it listed, it was gone in a cash deal. There have been 3 others that listed and were gone within 24 hours the same way.
The ones that aren’t worth looking at have blown out foundations, new thermo-twin windows, and some cosmetic improvements, but once you start putting a level on things and flipping switches, you run into problems.
[/quote]

Sounds like you got a good deal on a good house Skyzks. Congratulations and enjoy your new home. Payments should be very reasonable, as well as utilities. Don’t sweat it. Enjoy it.

51

Thanks Jeaton. My wife is very happy, as am I. We plan on having a couple of kids and a good life.

My wife was an English teacher, so she can teach them how to read, and I can probably teach them a thing or two about numbers.:wink: (at least till they get to eighth grade)

52

[quote]SkyzykS wrote:
Thanks Jeaton. My wife is very happy, as am I. We plan on having a couple of kids and a good life.

My wife was an English teacher, so she can teach them how to read, and I can probably teach them a thing or two about numbers.:wink: (at least till they get to eighth grade)
[/quote]

Wife and kids in a house that cost $60,000? How big is this house?

53

[quote]HG Thrower wrote:

[quote]on edge wrote:

[quote]HG Thrower wrote:
Yet somehow my county assessor raised my assessed value and thus my property taxes. Assholes.[/quote]

Are you still in California? I thought they couldn’t raise your property tax in California or at least, only a marginal amount.[/quote]

They did it somehow. I didn’t catch it until I got a notice that my escrow payments were going to increase, and at that point it was too late to contest the assesment. I’m going to have to fight it next year.[/quote]

Did you refinance? I wonder if that would be a loop-hole around the Jarvis-Gan(???) protection?

54

[quote]Headhunter wrote:

A $200,000 house will be $40,000 by 2012.
[/quote]

No way. Doubtful it will drop that much ever. For it to drop that much in only two years will take a catastrophy of biblical proportions. I’m talking a world war or a big-ass meteor or something like that.

55

Feb. 26 (Bloomberg) – Sales of previously owned U.S. homes unexpectedly declined in January for a second month, signaling the governmentâ??s extension of a tax credit is being limited by a lack of job growth.

Purchases fell 7.2 percent, the second-largest decline ever, to an annual pace of 5.05 million, the National Association of Realtors said today in Washington. In December, sales decreased a record 16.2 percent. The median sales price was unchanged from the same month last year, the group said.

The federal tax incentive helped drive purchases in the second half of 2009 and its extension in November may have trouble generating as much demand in coming months. Mounting distressed sales are making it harder to clear inventories, indicating job growth is required to sustain the recovery in the housing market.

â??The recovery in housing is likely to be a lot more prolonged than many had hoped,â?? said Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. â??Outside of the tax credit, there isnâ??t that much improvement.â??

GREAT DEPRESSION of the 21st Century…really getting rolling now…

56

862×700 106 KB

Homes prices going…up…?

57

[quote]Headhunter wrote:
Feb. 26 (Bloomberg) РSales of previously owned U.S. homes unexpectedly declined in January for a second month, signaling the government̢??s extension of a tax credit is being limited by a lack of job growth.

Purchases fell 7.2 percent, the second-largest decline ever, to an annual pace of 5.05 million, the National Association of Realtors said today in Washington. In December, sales decreased a record 16.2 percent. The median sales price was unchanged from the same month last year, the group said.

The federal tax incentive helped drive purchases in the second half of 2009 and its extension in November may have trouble generating as much demand in coming months. Mounting distressed sales are making it harder to clear inventories, indicating job growth is required to sustain the recovery in the housing market.

â??The recovery in housing is likely to be a lot more prolonged than many had hoped,â?? said Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. â??Outside of the tax credit, there isnâ??t that much improvement.â??

GREAT DEPRESSION of the 21st Century…really getting rolling now…[/quote]

It won’t surprise me at all if home prices decline dramatically at times over the next decade. I’m only challenging the degree (80%) and the quickness (only 2 years) you are suggesting.

58

[quote]Headhunter wrote:
GREAT DEPRESSION of the 21st Century…really getting rolling now…[/quote]

Economy grew 5.9% in fourth quarter

59

[quote]tedro wrote:

[quote]Headhunter wrote:
GREAT DEPRESSION of the 21st Century…really getting rolling now…[/quote]

Economy grew 5.9% in fourth quarter
http://money.cnn.com/2010/02/26/news/economy/gdp/index.htm[/quote]

The inflation is beginning.

60

I’m not sure why people argue with posters who you know are driven purely by ideology.

Its like arguing about god with believers.