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Housing Prices Fall Revisited (12/28/20070)

Discussion in 'Uncategorized Threads' started by Earl4140, Dec 28, 2007.

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  1. Earl4140

    Earl4140 TS Member

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    By Jeannine Aversa, AP Economics Writer
    WASHINGTON — "Sales of new homes plunged last month to their lowest pace in more than 12 years, a grim testament to the problems plaguing the housing sector.

    The Commerce Department reported Friday that new-home sales tumbled 9% in November from October to a seasonally adjusted annual rate of 647,000. That was the worst showing since April 1995, when the pace of sales was 621,000.
    The sales pace for November was much weaker than economists were expecting. They were predicting sales to drop around 1.8%, to a pace of 715,000.
    The median sales price of a new home dipped to $239,100 in November. That is 0.4% lower than a year ago. The median price is where half sell for more and half for less.

    By region, sales fell in all parts of the country, except for the West.
    New-home sales dropped 19.3% in the Northeast. They plunged 27.6% in the Midwest and they fell 6.4% in the South. However, sales increased 4% in the West.
    Over the last 12 months, new-home sales nationwide have tumbled 34.4%, the biggest annual slide since early 1991, and stark evidence of the painful collapse in the once high-flying housing market.

    That market has been suffering through a severe slump following five years of record-breaking activity from 2001 through 2005. Sales turned weak as did home prices. The boom-to-bust situation has increased dangers to the economy as a whole and has been especially hard on some homeowners.

    Foreclosures have soared to record highs and probably will keep rising. A drop in home prices left some people stuck with balances on their home mortgages that eclipsed the worth of their home. Other home buyers were clobbered as low introductory rates on their mortgages jumped to much higher rates, which they couldn't afford.

    With credit now harder to get to finance a home purchase, the problems in housing have grown worse. Unsold homes have piled up. The problems are expected to persist well into next year.
    The housing and mortgage meltdowns have raised the odds that the country will fall into a recession. And, it has given Democrats and Republicans politicians_ including those who want to be the next president — plenty of opportunities to spread blame around.

    To help bolster the economy, the Federal Reserve has sliced a key interest rate three times this year. Its latest rate cut, on Dec. 11, dropped the Fed's key rate to 4.25%, a two-year low. Many economists are predicting the Fed will lower rates again when they meet in late January.

    The economy's growth is expected to have slowed to a pace of just 1.5% or less in the October-to-December. Analysts believe that the housing and credit troubles will force consumers and businesses to tighten the belts, causing the economy to lose considerable speed. The housing slump has been a drag on overall economic activity, lopping more than a full percentage point off growth during the summer alone".
     
  2. Jim101

    Jim101 Active Member

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    Big yawn!!!!!!!!!!!!!



    Jim
     
  3. shannon391

    shannon391 Active Member

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    A lovely shape our great country has fallen into.
     
  4. smartass

    smartass TS Member

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    Shannon, what does that mean in English.
     
  5. phirel

    phirel TS Member

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    This is bad news for people who are selling their house. This is good news for people who are buying a house. This is no news for people who own a house and are making the monthly payments.

    For the construction industry, things are slow now. This Spring, they will pick up. Contractors will probably not need quite as many illegal Mexicans as they did last year.

    Pat Ireland
     
  6. EDGARMCM

    EDGARMCM TS Member

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    It is not the high cost of living that gets people in trouble, it's the cost of living high.
     
  7. Hipshot 3

    Hipshot 3 TS Member

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    The greedy lending policies of the Biggies{wachovia,Bank of America,etc} caught up with them. How long did they really think they could keep making unreal home loans to people who could not afford to repay them? They have some big loses to eat now, but,unfortunately, those are our loses to!
     
  8. stokinpls

    stokinpls Well-Known Member

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    Then there is the property tax revenues the democrat/socialists can't seem to get enough of. In 20 years you will have had to pay 50% of the value of your home to these bast*rds and what will you get for it? They used to say, "Don't live in an apartment, buy a home then your money won't be going down a rathole." Oh yeah? Well how about paying essentially double for a home financed for 30 years, and all the while you pay property taxes that are equal to half what it's worth during the first 20 of those years. And for what? Paved roads? School books? Might as well put it down a rathole.
     
  9. BILL GRILL

    BILL GRILL Well-Known Member

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    Housing prices have had double digit increases for at least the last 6 years here. The prices you are seeing is just a market correction. Interest rates are still in the 6's how do you get better than that? Wife sells real estate and had her best year ever in 07. There is definatly not a slump in Northern Michigan. Bill
     
  10. jimbotrap

    jimbotrap TS Member

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    stokinpls - Stop for a minute and consider this. If you purchased a home 20 years ago. Let say for a price of $125,000. As you stated you would pay a considerable amount in interest and taxes. However those items are tax deductible on your income taxes. Therefor you would have received credit for these payments of about 30% or more. Then consider what the property would be worth today (taking into the decline in value over the past year), about $400,000. And inscrease of 320%. Far and above the net interest and taxes you might have paid. And remember if you were renting that same property you would have received periodic rent increases. Your net return ZERO. Purchasing a home, with reasonable thoughts and financing is the best investment the average person can make. For my experience in what I have stated I have been in the Real Estate Industry for 47 years. - Jim Elliott
     
  11. Dahaub

    Dahaub Active Member

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    I don't know about you guys but where I live the new homes and condo's and apartments that are constantly being built is out of site. They haven't stopped or slowed down in the last 30 years. The area adds somewhere in the vicinity of 4 square miles a year in subdivisions and our area is growing a little in population but not all that much. The rents aren't going down we have a major university here, U of I. Everyone knows the students are getting r
    aped on the price of their rent and that also makes it tough on the lower income wage earners. They have a tough way to go and still make ends meet locally anyway. I honestly don't see how the prices of housing can consistantly grow and not take a rest. This area is immune to recession with it's hospitals and the University that is growing and in need of replaceing many of it's older buildings. That fact doesn't block the housing industry from facing the fact that they have over-built for the last few years. I guess we are all waiting for it to take a rest while the rest of the country is looking at prices that have dropped dramatically. I guess that it's a cycle that happens after every political regime.
     
  12. phirel

    phirel TS Member

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    stokinpls- I own a few rental properties. When property taxes and insurance go up do you think that the increase comes out of my pocket? I am pleased that some would rather rent than buy a house and I thank them for buying several houses for me.

    Pat Ireland
     
  13. Shooting Jack

    Shooting Jack Active Member

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    I'm sure most of you know this but not all probably. People that rent get to send their kids to school for free. No, I'm not talking about subsidized lunches, I'm talking about the fact that they don't have to pay taxes like a land owner. I live in a small South Georgia town and paid close to $900.00 in school taxes on a home I bought in 1988 for $50,000.00 that they now say is worth $90,000.00. The taxes just keep going up for the home owner but people are buying old dilapadated mobile homes, putting them in the country and renting them out for ridiculous prices. They are willing to rent at those prices because they are illegals. Oh well, I'm through ranting. Home buyers have to be smart or get help in their purchases so they don't get stuck in the situation so many are in now. Jackie B.
     
  14. halfmile

    halfmile Well-Known Member

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    Who thinks renters don't pay property taxes? I'll bet they think they don't pay insurance either. Or maintenance and upkeep.

    Yeah, I just take care of that for the folks. Uh-huh. With money off the tree in my back yard.

    HM
     
  15. phirel

    phirel TS Member

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    HM- It is clear that some do not understand how we determine how much the rent will be on a unit. I run around a 5% vacancy rate and the renters even pay for the time a unit may not be rented.

    What would happen if I put in an advertisement like this:

    Townhouse for rent $500/month if tenant pays all expenses or $650 if I pay all expenses.

    Pat Ireland
     
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