Housing 2008/2009 Thread

[LegendKiller]

Originally posted by: dmcowen674

Originally posted by: dullard
I'm not going to put as much work into this any more.

I'll still update it monthly, around the end of the month/beginning of the next month.

Big news today so I'll post this:

9-24-2008 Price of existing homes sees record fall

Prices of existing homes in the United States suffered a record drop in August while the sales pace slowed and the overstock of homes shrank, the National Association of Realtors said on Wednesday.

The realty trade group said in a report that as many as

2 in 5 home sales are by borrowers who have seen their property lose value or are facing foreclosure.

What a stupid bolding. No shit a lot of houses are losing value, but to lump that in with foreclosures?

Why not say...


5 in 5 home sales are by borrowers who have seen their property get taxed or are facing foreclosure.

 

[WhipperSnapper]

Originally posted by: dmcowen674

9-24-2008 Price of existing homes sees record fall

Prices of existing homes in the United States suffered a record drop in August while the sales pace slowed and the overstock of homes shrank, the National Association of Realtors said on Wednesday.

Good. We needed a record fall to help make up for the record price jumps that occurred during the bubble. As the price of housing returns to Earth, perhaps members of the lower-middle class will be able to afford small houses again.

 

[dullard]

Originally posted by: dmcowen674
Big news today so I'll post this:...Prices of existing homes in the United States suffered a record drop in August while the sales pace slowed

Followed by: 17 year low in new home sales.

The new home sales are continuing their march towards zero new home sales. Do I think it'll actually reach 0? No. But it is getting closer and closer as time progresses. The annual rate of new home sales is now 67% below their fairly recent highs and show no signs of stopping the decline.

The graphs in the OP are now updated for this month. At this rate, I'm almost considering putting back in the link of housing confidence to the S&P level. Hint: it is NOT a pretty picture.

 

[dullard]

The new graph with all of September's data is up.

It looks like there may be an uptick on existing home sales, but that stat has been flat and volitile for months. We'll have to wait and see. Most other stats are reasonably flat except for prices - down 9% from last year.

Average existing home prices in Sept have now fallen 3 years in a row.
[*]Sept 2005: $225k
[*]Sept 2006: $221k
[*]Sept 2007: $211k
[*]Sept 2008: $192k

I've also put back in the S&P graph now that it doesn't look so idiotic.

 

[Capt Caveman]

I thought sales were up 15% in Sept.

 

[dullard]

Originally posted by: Capt Caveman
I thought sales were up 15% in Sept.

No. Existing home sales were at their highest level in a year, but not by nearly that much. They are up 5.5% from Aug, up 6.8% from the recent low in June, and up 1.4% from Sept of last year. And one of the main reasons the sales are up is because prices are way down.

 

[Trianon]

Tough times, I amstill thanking my guardian angel for keeping me out of new mortgage in early 2007...

Meanwhile, the Standard & Poor's/Case-Shiller national home price index released Tuesday tumbled a record 16.6 percent during the quarter from the same period a year ago. Prices are at levels not seen since the first quarter of 2004.

AP

 

[Veramocor]

Originally posted by: dullard

Originally posted by: dmcowen674
Big news today so I'll post this:...Prices of existing homes in the United States suffered a record drop in August while the sales pace slowed

Followed by: 17 year low in new home sales.

The new home sales are continuing their march towards zero new home sales. Do I think it'll actually reach 0? No. But it is getting closer and closer as time progresses. The annual rate of new home sales is now 67% below their fairly recent highs and show no signs of stopping the decline.

The graphs in the OP are now updated for this month. At this rate, I'm almost considering putting back in the link of housing confidence to the S&P level. Hint: it is NOT a pretty picture.

This is actually good. With less new homes on the market and population continuing to grow eventually there should be a stabilization in existing home prices.

Once prices are stabilized there should be less foreclosures and banks will be willing to lend more money.

 

[Dufusyte]

No new homes = no construction industry = large employment sector missing in action.

Imagine if there were no new cars = no automobile industry = major employment impact.

It's not so much about the impact on house prices as it is about the impact on employment. And when people do not have jobs there are less consumers, and the effects ripple out from there.

 

[brandonbull]

Originally posted by: Veramocor

Originally posted by: dullard

Originally posted by: dmcowen674
Big news today so I'll post this:...Prices of existing homes in the United States suffered a record drop in August while the sales pace slowed

Followed by: 17 year low in new home sales.

The new home sales are continuing their march towards zero new home sales. Do I think it'll actually reach 0? No. But it is getting closer and closer as time progresses. The annual rate of new home sales is now 67% below their fairly recent highs and show no signs of stopping the decline.

The graphs in the OP are now updated for this month. At this rate, I'm almost considering putting back in the link of housing confidence to the S&P level. Hint: it is NOT a pretty picture.

This is actually good. With less new homes on the market and population continuing to grow eventually there should be a stabilization in existing home prices.

Once prices are stabilized there should be less foreclosures and banks will be willing to lend more money.

That's dandy. I get to celebrate the joys of owning a home that is worth ~25% less than I owe for it. I hope I don't need to move for about 10 years.

 

[dmcowen674]

Originally posted by: brandonbull
That's dandy.

I get to celebrate the joys of owning a home that is worth ~25% less than I owe for it.

Same here

I'm serious when I say I should get a bailout of that 25% difference.

It was no fault of mine that the Real Estate/Bank business was corrupted by the Republicans.

 

[TridenT]

Originally posted by: dmcowen674

Originally posted by: brandonbull
That's dandy.

I get to celebrate the joys of owning a home that is worth ~25% less than I owe for it.

Same here

I'm serious when I say I should get a bailout of that 25% difference.

It was no fault of mine that the Real Estate/Bank business was corrupted by the Republicans.

Stop.





-_-

 

[WhipperSnapper]

Originally posted by: Veramocor

This is actually good. With less new homes on the market and population continuing to grow eventually there should be a stabilization in existing home prices.

Once prices are stabilized there should be less foreclosures and banks will be willing to lend more money.

Eventually the prices will hit their bottom and then they'll become scarce and new homebuilders will be able to profitably build new construction again. Also, as you mentioned, the nation's population is only increasing, though that increase might be primarily composed of lower economic class people (who can barely afford housing).

Housing prices have been overinflated for years now and are inconsistent with the realities of people's incomes, especially in this new Greater Depression era, so they'll just have to keep dropping.

 

[dullard]

A series of new bad records have been reached this month. See the new graph in the OP.

[*]Housing starts are at their record low in the entire half century of recording this data. This is a good thing since we have too many houses which was one major component to this whole housing problem. The bad news is that home construction was about 6% of the entire US GDP and if you include the associated housing related businesses (renovation, furniture, banking, etc) it comes close to 20% of the GDP if I remember correctly. Thus, the breakdown of this sector of the economy makes the big 3 auto problems look miniscule.

[*]The year-over-year housing prices have fallen by a record -11.4%. This isn't a seasonal problem since Oct 2008 prices are now down 20% from Oct of 2005 - the same month of the year. This price fall is good, since housing prices were too high to be sustained. But it is bad since it has lead to record numbers of foreclosures and the whole banking mess. I'd rather see prices fall slowly for a longer but more subtle period of pain.

[*]New home sales are at an 18-year low. This is a result of the new home starts at a record low. But, we still have a massive inventory of unsold homes. We need to have lots of sales with few starts to get out of this mess. We are having the opposite.

The one bright spot was that existing home sales haven't fallen in a year. We clearly hit a bottom. Hopefully, it is a permanent bottom and not a temporary one that will be broken. Sadly 45% of those sales are now foreclosures or otherwise distressed sales.

 

[WhipperSnapper]

Originally posted by: dullardHousing starts are at their record low in the entire half century of recording this data. This is a good thing since we have too many houses which was one major component to this whole housing problem.

Too many houses? Tell that to the working poor who rent apartments because the price of housing is so high.

 

[brandonbull]

Originally posted by: WhipperSnapper

Originally posted by: dullardHousing starts are at their record low in the entire half century of recording this data. This is a good thing since we have too many houses which was one major component to this whole housing problem.

Too many houses? Tell that to the working poor who rent apartments because the price of housing is so high.

Home prices too high? WTF? Homes prices are a joke compared to when I bought.

 

[LegendKiller]

Originally posted by: brandonbull

Originally posted by: WhipperSnapper

Originally posted by: dullardHousing starts are at their record low in the entire half century of recording this data. This is a good thing since we have too many houses which was one major component to this whole housing problem.

Too many houses? Tell that to the working poor who rent apartments because the price of housing is so high.

Home prices too high? WTF? Homes prices are a joke compared to when I bought.

And it was silly to buy when you bought. Anybody who bought to hold post-2002 is going to get screwed.

 

[Slew Foot]

Originally posted by: LegendKiller

Originally posted by: brandonbull

Originally posted by: WhipperSnapper

Originally posted by: dullardHousing starts are at their record low in the entire half century of recording this data. This is a good thing since we have too many houses which was one major component to this whole housing problem.

Too many houses? Tell that to the working poor who rent apartments because the price of housing is so high.

Home prices too high? WTF? Homes prices are a joke compared to when I bought.

And it was silly to buy when you bought. Anybody who bought to hold post-2002 is going to get screwed.

Housing will continue to decline up until the point that the local median income can support the price of a house on a fixed rate mortgage with a substantial down payment. FWIW, the economy as a whole will stagnate until this point is reached as well.

 

[Jhhnn]

Originally posted by: LegendKiller

Originally posted by: brandonbull

Originally posted by: WhipperSnapper

Originally posted by: dullardHousing starts are at their record low in the entire half century of recording this data. This is a good thing since we have too many houses which was one major component to this whole housing problem.

Too many houses? Tell that to the working poor who rent apartments because the price of housing is so high.

Home prices too high? WTF? Homes prices are a joke compared to when I bought.

And it was silly to buy when you bought. Anybody who bought to hold post-2002 is going to get screwed.

I think that's a little extreme, LK. It depends on the area and the terms of the loan. What's happened is that even people who bought what they could afford in non-bubble areas on 30 year notes have to think long-term because of negative equity issues. People who planned on making a killing flipping huge on option arms in bubble markets where they can barely afford the minimum are, uhh, royally screwed... Lots of in-between situations, as well.

I guess it doesn't really matter, though, if the water is 3' over your head or 1000' feet deep if you can't swim... particularly if you're wearing cement overshoes provided by your friendly real estate agent and mortgage broker...

 

[LegendKiller]

Originally posted by: Jhhnn

Originally posted by: LegendKiller

Originally posted by: brandonbull

Originally posted by: WhipperSnapper

Originally posted by: dullardHousing starts are at their record low in the entire half century of recording this data. This is a good thing since we have too many houses which was one major component to this whole housing problem.

Too many houses? Tell that to the working poor who rent apartments because the price of housing is so high.

Home prices too high? WTF? Homes prices are a joke compared to when I bought.

And it was silly to buy when you bought. Anybody who bought to hold post-2002 is going to get screwed.

I think that's a little extreme, LK. It depends on the area and the terms of the loan. What's happened is that even people who bought what they could afford in non-bubble areas on 30 year notes have to think long-term because of negative equity issues. People who planned on making a killing flipping huge on option arms in bubble markets where they can barely afford the minimum are, uhh, royally screwed... Lots of in-between situations, as well.

I guess it doesn't really matter, though, if the water is 3' over your head or 1000' feet deep if you can't swim... particularly if you're wearing cement overshoes provided by your friendly real estate agent and mortgage broker...

It was silly to buy post-2002/3 if you were buy-and-hold unless you bought in 2007 when you could drive a hard bargain, even then, it was silly. It was painfully obvious that prices were ridiculously high and would come down. To buy into a peak is a bad move, especially considering negative carry.

 

[Jhhnn]

No arguments with that, LK. I merely offered that your assessment doesn't apply universally, and that there's a difference between being screwed and having made a less than optimal deal. Lots of recent homebuyers will be OK in the long run, even if it takes many years of being chained to the oars.

It's tough to dissuade people caught in the throes of homebuying fever, particularly younger couples w/ children or children on the way. I've tried with my younger coworkers over the last 5 years, with very limited success. Here in the Denver area, we didn't see the completely giddy prices in some other areas, so the impact shouldn't be profound, just hurtful. Being underwater on the valuation isn't nearly as big a deal as not being able to make payments. If people can keep showing up to work, payin' the bills, puttin' one foot in front of the other, they'll come out ahead somewhere down the road...

 

[dullard]

Bad. Really bad. Really, really bad.

Existing home sales break the glass floor that they've been sitting on for nearly a year. November sales were 7.5% below what was the worst month in this decline.

Prices plummeted with the worst year-over-year drop in this downturn. They are down almost 3% from last months poor results, down over 13% from this time last year, and down over 21% from their all time high. Price slide was the worst since the Depression.

New home sales continued their downward slide losing another 3% in a month. They are now off 71% from their all time high.

New home starts were down a whopping 18.9% from last month's dismal number! Starts are down 73% from their all time high.

And that is just the surface numbers. Deep down things are worse. The inventory of unsold homes is now at 11.2 months. Meaning that there is little chance of recovery any time soon.

 

[Slew Foot]

One mans bad is another mans great.

 

[Craig234]

Originally posted by: LegendKiller
[It was silly to buy post-2002/3 if you were buy-and-hold unless you bought in 2007 when you could drive a hard bargain, even then, it was silly. It was painfully obvious that prices were ridiculously high and would come down. To buy into a peak is a bad move, especially considering negative carry.

That's an awfully cavalier attack with the benefit of 20/20 hindsight, however much many of us suspected it was the case.

Surely the stock market being 'at a peak' and 'foolish to buy' in 2007/first half 2008 was 'painfully obvious' too, and you can point us to you saying so before the crash?

Not to mention real estate is not entirely an investment-driven issue, people need to live places, and that carries some weight too. No point in trying to call them 'foolish'.

 

[Slew Foot]

Case Shiller reports more record declines... blah blah blah, same old story. Until houses come more in line with incomes expect more of the same.


And to end 2008, this is what 1 mill+ buys you in CA
http://www.redfin.com/CA/Palo-...-St-94306/home/1005444

Yup, buy now or be priced out forever
Cant wait to see the carnage of 2009, hopefully the high end in CA starts to take a dive.