Posted: June 24th, 2010 | Author: Joe | Filed under: Economy, Real Estate | Tags: Economy, home buyer credit, home sales, Stock Market | No Comments »
Am I missing something here?
The news of the day seems to be that Stocks slip after new-home sales tumble . Really? I mean, I just don’t get this, This assumes that investors were expecting home sales to remain steady, possibly even rising. But that doesn’t make any sense.
I’m not an expert or an economist by any stretch, but even I called this back in May! I don’t point that out to say “I told you so,” rather to illustrate that it’s really common sense that when the government stops paying people to buy something, they buy less of it or stop altogether.
The Homebuyer Tax Credit ended and home sales went down 33% and hit a record low. What happened?
All those people who were thinking of buying a home in the 1st half of 2010 made sure they got in before the credit expired. Essentially, the government failed to stimulate anything and only motivated buyers to shift their timeframe of purchase by a month or two.
The rest of 2010 will be little more than limping through with even less buyers than might otherwise have been there.
I just don’t get how these people get so caught up in their bubble and believe their own spin even when it is in direct opposition to reality. It’s simply amazing…
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Posted: January 27th, 2009 | Author: Joe | Filed under: Real Estate | Tags: home sales, Home Selling, Real Estate | 1 Comment »
Las Vegas, of all places, is seeing an increase in home sales!
This is a good sign, because Vegas was one of the hardest hit when the bubble burst. Since last year, home sales have risen 15%.
The flip side of this coin is that the home prices have fallen 28%. Ouch! But this is all part of what has to happen.
The nature of a bubble is that prices get bid up to an unsustainable level. When the bubble pops, or deflates, prices must fall in order to reach the sustainable point.
I found this in an article on Yahoo! finance:
“The reason? Motivated sellers–those in distress or foreclosure–or banks with too many homes on the books are slashing asking prices in order to unload their properties.”
I think it’s also non-foreclosure sellers coming to terms with reality.
Back when we sold our house, my wife an I were in awe at the other houses in our neighborhood. Every house was identical, save for a window or two over the front door, it was a real cookie cutter neighborhood. Great starter homes though.
Our house was the first (and only in the last 6 months!) to sell. Our secret was that we priced our house at fair market value. There were 7 other homes for sale at the time our sold. Each one of them was asking a price that was the going rate – 6-12 months earlier! They were out of touch with the market place. I can understand that, but I never did understand what realtor in his right mind would take a client that was going to ignore reality and ultimately bring down the realtor’s sales statistics.
Eventually, even these stubborn and fanciful sellers face reality and lower their prices (usually much lower than where they could have started).
That’s what’s happening in Vegas, Phoenix and San Diego where home sales are up 10% and 90% respectively.
Eventually the prices will bottom out, sales will level off and prices will begin to rise again.
Also, remember that real estate is local, even in the post-bubble era. The part of the country where I live never saw the outrageous hyper-inflation of housing prices, and the median home price has gone up 3% over the past year.
Whether you’re a buyer or a seller, you must know your market.
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