August 25, 201016 yr http://www.msnbc.msn.com/id/38847695/ns/business-real_estate Sales of new homes dropped sharply last month to the slowest pace on record, the latest sign that the economic recovery is fading. The Commerce Department said Wednesday that new home sales fell 12.4 percent in July from a month earlier to a seasonally adjusted annual sales pace of 276,600. That was the slowest pace on records dating back to 1963. The past three months have been the worst on record for new home sales. Weak home sales mean fewer jobs in the construction industry, which normally powers economic recoveries. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders. "If new homes aren't selling, there's no incentive to build more," said Nigel Gault, chief economist at IHS Global Insight. Builders have been forced to compete with foreclosed properties offered at significantly lower prices. Partly as a result, new home sales made up only about 7 percent of the housing market last year. That's down from about 15 percent before the bust.
August 25, 201016 yr "The latest sign that the economic recover is fading" is the best line in the story. I wasn't aware that we had an economic recovery to start with.
August 25, 201016 yr Author "The latest sign that the economic recover is fading" is the best line in the story. I wasn't aware that we had an economic recovery to start with. I feel the same way. The media keeps talking about the economic recovery fading. I've not seen much of any recovery to fade.
August 25, 201016 yr Author No surprise here. Nobody can get credit. Credit it tighter, but you can get it. I think some of the "can't get credit " stuff is media driven. Mrs C and I and at least 6 people I work with have refinanced in the last six months to take advantage of these lower rates. The lady who did our refy said she was doing half of what she did before. She said they were not lending to marginal borrowers, but if you had good credit there was no problem getting money.
August 25, 201016 yr Credit it tighter, but you can get it. I think some of the "can't get credit " stuff is media driven. Mrs C and I and at least 6 people I work with have refinanced in the last six months to take advantage of these lower rates. The lady who did our refy said she was doing half of what she did before. She said they were not lending to marginal borrowers, but if you had good credit there was no problem getting money. Agreed and mortgage rates are about as low as I think they could possibly go.............
August 25, 201016 yr Should the numbers be better? Obviously. Do the numbers reflect consumer confidence? I would say so. However, while I know it is an alarming figure, to me it is refreshing not as many people are buying homes. For one, obtaining a loan is more difficult. And a lot of people simply do not need to be home buyers until other debts are abolished. Credit card debt has declined recently which is a promising sign. A big reason we are in this mess is because so many homes were being sold.
August 25, 201016 yr Author While I know it is an alarming type figure, to me it is refreshing not as many people are buying homes. For one, obtaining a loan is more difficult. And a lot of people simply do not need to be home buyers until other debts are abolished. Credit card debt has declined recently which is a promising sign. A big reason we are in this mess is because so many homes were being sold. I agree with most of that. But I think it's because so many homes were sold to people who couldn't afford their house. Credit was way too lax, and banks were almost forced to make loans. And some were unscrupulous. This increased demand for bigger homes (almost everybody wants bigger and better), and increased new home sales. To the point when it finally burst.
August 25, 201016 yr Does this thread compare to the 20-somethings thread? In the past, many 20-somethings finished college, got a job, and bought a house. Now finishing college doesn't guarantee a job, which obviously means no house purchase. Just a thought.
August 25, 201016 yr Government messing with free market is the simple explaniation here. The tax credit brought many buyers to the market some out of phase. The buyers paid higher (above free market) prices and the government contributed the premium. Demand was still below supply but they were close for a while. This policy drove the low end of the market, currently made up of foreclosure and preforclosure properties. The buyers in the end, paid close to market prices after the tax credit, the sellers (many institutional entities) recieved an above market price for the properties, and the tax payers paid the bill. All this brought on the current situation, few buyers in the market, as many bought out of phase, and many sellers cutting prices to compete for the few interested in buying at this time. This is the free market adjusting to the temporary government intervention. Winners: Instituational sellers Losers : Tax payers
August 25, 201016 yr This wasn't what I wanted to see considering I am signing the papers on Thursday to put our house up for sale.
August 25, 201016 yr This wasn't what I wanted to see considering I am signing the papers on Thursday to put our house up for sale. Ouch. I wish you the best.
August 25, 201016 yr Author This wasn't what I wanted to see considering I am signing the papers on Thursday to put our house up for sale. Home prices don't seem to have been hammered here nearly as much as other parts of the country. My mother-in-law sold hers in a month for what she was asking, in Lexington. She was in a good neighborhood, with good school, etc. She had thought about selling 3 years ago and had it appraised then to see what it was worth before putting it on the market. Ended up not selling. The house appraised for 3% more this time than last. So while it didn't increase in value during that time. At least it didn't go backwards. I only know 2 realtors. They both say that that 85% of the houses selling are under 125,000 or over 300,000. The folks in the middle are pretty much screwed right now. They'll have to wait it out. Good luck to you.
August 25, 201016 yr "The latest sign that the economic recover is fading" is the best line in the story. I wasn't aware that we had an economic recovery to start with. Didn't you hear this is "the Summer of Recovery"??
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