View Full Version : New Home Sales down 33% month over month
June 23, 2010, 09:55
MKT takes a shit - if this is any indication of what happens when govt funny money gets pulled back ($8k home buyer credit) and I think it is, things are going to get interesting - if they pull back stim. we tank if they don't pull the stim. we have an unsustainable $1.5T/yr structural deficit - fun fun.
June 23, 2010, 14:19
The real estate market is still flooded with vacant forclosures and walk aways.
The real estate market is still flooded with homes that are not worth what the seller owes on them, in Helocs and mortgages.
The last market segment is the older units for sale at unrealistic prices. Bargains are selling modestly in all markets.
The Fed rules about not dropping the principal originally borrowed, is keeping forclosures perking right along. it is also keeping the empty units, empty, with no income stream to support them. How much longer can that happen?
Some one is carrying all that paper as an asset to keep up the sham, when the real value of the assets is maybe only 60% of the borrowed amount being carried on the books---- Probably fannie and Freddie. I guess they have special rules to hide the losses.
If the amt borrowed, was lowered, then the original buyers would still be in the homes, living the life of Reilly.
It truly resembles a house of cards.
I wonder when the whole deflationary economy will hit the real estate market, or if the Fannie/Freddie/Sallie orders will be permanent, to keep an artifical value on the assests that will be vacant for the next decade.
They units may even fall down or fall apart, but the mortgage paper will still exist on the land. They say "under all is the land" and land does not wear out.
I guess the only way to look at it, in the future, is that you buy the land, and homes must be depreciated like a car or business stucture to justify all the equity evaporating from the structure, not the land. Of course that only works if everyone lives in a shack or tent on the site.
June 23, 2010, 14:52
It is killing a entire segment of the economy, not to mention my business.
My phone used to ring off the wall with regards to the construction industry... now it is quiet.
June 23, 2010, 15:43
Skil - as you know i am a builder - i know EXACTLY what you are talking about
June 23, 2010, 20:17
When they stop the subsidy of Unemployment comp--that will be it. That train is flying down the track right now.
June 23, 2010, 20:31
yep - people are already falling off, which will have the perverse effect of dropping the unemployment numbers giving the impression that all those people magically just found jobs...
June 23, 2010, 21:48
California will go first. My brother tells me that the gov't there is telling people that when they run out of their 99 weeks of compensation, they will be classified as UNEMPLOYABLE. Just like you said, the unemployment numbers will go down, creating a false positive.
Oh--it's going to get REAL ugly. With the tensions created with illegals taking the few jobs there, unemployment comp going away, the comig spike in the cost of oil--just the thing needed to enact Martial Law is one pissed off citizen to get in a fight with an illegal or a politician.
Gonna happen there--wait and see.
June 28, 2010, 15:13
Yep, "The Troubles" are going to start in one of the Marxist paradises--Kali, ILL, or PRNY--in that order.
July 01, 2010, 14:10
Well, at least the "quants" now have hard data on how "sensitive" the market is--i.e. VERY, when piddling $8,000 credit can sway it that much.
Then again, that was probably a major motive for the "credit program", buried somewhere back in the secret memo, long before it ever reached the House floor.
Same with cash for clunkers--LOTS of hard data points to spreadsheet on that one.
July 01, 2010, 14:34
And in DC, a full 30% of that number of sales were foreclosures, compared to 1% in 2006. Black Swan, anyone?
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