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Sales of New Homes Fell by 26% in 2007
nytimes.com — The housing industry, caught in a maelstrom of sinking demand, rising foreclosures, and bulging inventories, is in its worst slump in decades, a growing body of economic evidence shows.
mrbubbleboy- 860 diggs
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- Condemned, on 01/29/2008, -2/+50It'll probably go down even further in 2008
- Spero, on 01/29/2008, -13/+0You expect new home sales to drop by more than 52% in two years? If that's the case, you might want to pack your bags ASAP.
- ausfahrt, on 01/29/2008, -0/+8Even further could be an extra 1%. Meaning it's not likely to recover this year.
- greevar, on 01/29/2008, -0/+9Recover? The market is finally falling back to prices that existed before they were artificially inflated.
- ScottMitchell, on 01/29/2008, -0/+5Yes, because the supply of homes far exceeds the real demand. The housing bubble was not propped up by an explosion in population, but rather by the access to easy money with nothing down.
- Spero, on 01/29/2008, -1/+2You're right about the number of new homes being larger than the demand...this has also been the case for 2 years. Just now is it becoming 'relevant' to the public. Prices will adjust as have the construction of new homes. Another 26% dip on top of 2007 would be ridiculous.
- Dush, on 01/30/2008, -0/+0Yeah, but the demand only fell because debt stopped being so cheap.
They just need to finance and refinance everyone down to 1% and you'd see the market take off.- ScottMitchell, on 02/01/2008, -0/+1But what investor is going to loan out their money to a homeowner for 1%? That's not even keeping up with inflation. You'd do better sticking that money in a savings account, for cripes sake.
- Moses27, on 02/05/2008, -0/+0Savings account, not a bad idea. But what about finite resources as well ? Like Gold, Oil, etc etc. ?
- ausfahrt, on 01/29/2008, -0/+8Even further could be an extra 1%. Meaning it's not likely to recover this year.
- 3tcp, on 01/29/2008, -1/+8Developers won't build new homes to sell if there is a huge surplus of existing homes for sale (and under foreclosure).
- Locke2053, on 01/29/2008, -3/+7Actually, developers are STILL building and selling houses, sometimes at a loss, to keep their business and employees in working condition to make money once the market inevitably turns back around.
This is why housing inventories have not fallen despite the fact that houses are still selling (just more slowly). Interviews I've heard with builders echo this sentiment.
- Locke2053, on 01/29/2008, -3/+7Actually, developers are STILL building and selling houses, sometimes at a loss, to keep their business and employees in working condition to make money once the market inevitably turns back around.
- sinurgy, on 01/29/2008, -3/+23At the risk of sounding bitter, I kinda want to send a big "f u, I told you so" to all those people who argued with me so vehemently the past couple of years.
- Cmstech, on 01/30/2008, -3/+2does it feel good to be so right?
- Butros, on 01/30/2008, -0/+5It will feel good to be able to afford a starter home on a good income
- sinurgy, on 01/30/2008, -0/+2Yes, yes it does!
- Cmstech, on 01/30/2008, -3/+2does it feel good to be so right?
- FredFredrickson, on 01/29/2008, -1/+10Sounds good to me... then I can finally afford one myself. :D
- senfo, on 01/29/2008, -1/+14I'm in the same situation as you. For my own benefit, I would love to see the housing market come tumbling down to what it was back in 2000.
The housing market is absolutely ridiculous in my area. Houses that were going for $175,000 in 2000 are now going for $500,000. Houses that were worth $350,000 are now going for well over $1,000,000. This is great for anybody that already owns a house, but horrible for anybody looking to buy one. Salaries over the last 8 years haven't gone up anywhere near as much as the housing market. It makes me sick to think about it.- BESTenemy, on 01/30/2008, -1/+2Same in my area. A friend had to dig into equity in order to be able to afford higher tax payments. Then all of the sudden, the value of the house depreciated and the bank called in the loan. The guy had to sell the house and move into an apartment. He did mismanage his funds by borrowing more out of equity than he needed and spending, but still, I think that the property tax should not be fluctuating along with the appraisal value. It should remain locked to the purchase price.
- Elliuotatar, on 01/30/2008, -0/+1Property tax sucks ass, but if you have it at all, it should be based on the value of the land, not the value of the home you build on it.
- BESTenemy, on 01/30/2008, -1/+2Same in my area. A friend had to dig into equity in order to be able to afford higher tax payments. Then all of the sudden, the value of the house depreciated and the bank called in the loan. The guy had to sell the house and move into an apartment. He did mismanage his funds by borrowing more out of equity than he needed and spending, but still, I think that the property tax should not be fluctuating along with the appraisal value. It should remain locked to the purchase price.
- senfo, on 01/29/2008, -1/+14I'm in the same situation as you. For my own benefit, I would love to see the housing market come tumbling down to what it was back in 2000.
- ScottDaMan, on 01/29/2008, -3/+22I would like to thank those that said I was making the stupidest mistake of my life selling my house 2 years ago and renting just to buy now. I'm a total moron. You were right.
- Locke2053, on 01/29/2008, -2/+7I'll add to that sentiment and direct it to the people who told me I was "throwing money away" by renting these past two years. Now you home owners are the ones throwing money away with interest and leverage! Don't worry, you can crash in the spare room in my large, luxury apartment after you get evicted :-)
- StaticThunder, on 01/29/2008, -10/+5Umm... sure. I've got a 30 year fixed at 6.25%, and while I've lost some equity, like most homeowners, I'm deducting the interest payments on my taxes, and since I'm likely just to buy another similar house when I move (at a lower price because of the market), I'm still ahead of perpetual renting and I'll regain my equity when prices come back up in a few years.
This is only a bad thing if you are an investor looking to flip a property, not a homeowner.
Shadenfreude is soooo unattractive.- Locke2053, on 01/30/2008, -1/+9You're wrong. I'll give you a simple example.
If one person had listened to the "throwing money away" nonsense and bought a house last year instead of renting, and another person just rented (all other things equal), the person who rented would have a substantially higher net worth than the person who bought a home. It's not about flipping. You are fooling yourself if you think you are ahead vs. renting when your net worth is lower than it would have been if you rented.
Also, if someone who bought a house that dropped in value, and now he has to move because of his job, he could end up owing more money to the bank than his house is worth. When he moves to a new area, he will still have to pay on his old mortgage, and he won't be able to qualify for a new mortgage because he already has one that is under water.
Buying a house is like buying stocks with leverage. You borrow to purchase more shares/house than you can afford. If the price goes down, you can end up losing more money than you initially invested! Houses are eve more leveraged than stocks because most people borrow much more than double their equity value. - StaticThunder, on 01/30/2008, -3/+1*I* and most home owners didn't buy more house than we could afford. My mortgage is not underwater. I can get out of my house if I have to, but why would I sell it when rent prices are going up, and I can cover everything but my contribution to the equity which will eventually appreciate again in value?
You're assuming that prices never rise again. All I have to do is manage to hold onto my investment, one that nearly pays for itself, and wind up ahead of the game. The renter has to budget every dollar I already do, in excess of his rent, and pull in the same return... investing in what? A falling stock market? Low-yield savings funds?
Eventually, I will pull ahead again. - StaticThunder, on 01/30/2008, -3/+1Also don't forget that inflation will drive rent prices up, wheras the amount I owe the bank is fixed in dollars and my payments never change. Not to mention all the intangibles which makes the hassle and risk worth it... mainly not being beholden to a landlord who will raise rates on a whim, or evict me to do a condo conversion, or tell me what kind of pets I'm allowed to have, and not having thin walls between me and the neighbors.
Believe me, you're not making me sorry with the doomsaying. People who enter into a house responsibly and keep a tight reign on their credit wind up just fine. This is a temporary situation until the flippers and sub-primers get kicked out of the market , and since I will *never* rent again by choice, falling prices (up to a point) actually just make it easier for me to upgrade when I move. - Locke2053, on 01/30/2008, -1/+1You are either misreading or misrepresenting me by calling my statement "doomsaying." I was very specific to say that over "these past two years" renting was a better financial move. I never assumed prices won't rise again.
Incidentally, I find it hilarious that you think owning is "less of a hassle" than renting. My rental company does all of the mowing/landscaping for me. When my dishwasher, air conditioner, fridge or washer/dryer break, or if there is a plumbing problem, they fix it at no additional cost to me, and I don't have to stay home from work to let the repairman or appliance delivery person in. If I move, I don't have to worry about hiring realtors, inspectors, and the like. I also don't have the hassle of moving appliances. Renting is less of a hassle.
Buying is only better in an up market when you are sure you won't have to move soon... and for people don't mind mowing and doing other chores. Even then, it is only slightly better because most homeowners greatly underestimate the expenses involved in home maintenance and financing. - StaticThunder, on 01/30/2008, -0/+1Yes, relying on your landlords willingness to repair and maintain the property is always a better bet than buying a home warranty or developing some handyman skills of your own. You're paying for that landscaping, you're paying for those repairs. Its all rolled into your rent. I do them myself for cheap, and I actually enjoy it.
You guys are revelling in the collapsed market, and telling millions of homeowners that they've made a horrible mistake. You're misguided. If you're renting from someone, you're renting from an owner. If there were no owners, where would you live?
Yes, renting in the last two years would be better, if you didn't already have a house, but nobody buys a house for only two years. Most homeowners lose NOTHING by a market downturn and gain a lot over their lifetime. - Locke2053, on 01/30/2008, -0/+1I don't follow your logic. Home owners have been reveling in equity increases while looking down on renters. It is satisfying to see such arrogance vanish, especially to those whom have been the targets of this unjustified ridicule. That's the point of the thread.
Again... "You're paying for that landscaping" ... Well, duh. And I'm still financially better off. That's my point. - StaticThunder, on 01/31/2008, -0/+1Most homeowners didn't turn their homes into ATMs and the additional equity only means something when they retire, sell the house and move into a nursing home. You guys have had it rubbed in your face that "oh, you suck because you rent" and such low self-esteem that you've lost just as much perspective as the "buy now, you can't lose in real estate crowd"
In what world is it better to give money to someone else to borrow (and maintain, and give them a profit for) their property than it is to own property that you can lease and the only one thats profiting is you? Yes, the bank profits too, thats why you have to run the numbers but you're still paying the interest from the bank on the loan that built the apartment complex if its new, you just can't see it.
Yeah, in a world where property is overvalued. Thats temporary. The market is correcting the stupid out of it. - Locke2053, on 01/31/2008, -0/+1Question: "In what world is it better to [bla bla bla]?"
Answer: In a world where where your net worth is higher if you [bla bla bla]. It doesn't matter how you phrase the [bla bla bla], the answer is still the same. You can't talk your way out of that.
The housing futures traders collectively think the market will bottom in 2010. The economists who use ROE analysis think the housing market will fall 15% to 30% from its peak value.
I like to go by the evidence... I'm planning on renting for at least one more year before I look at condos, because that's the smartest financial move.
My accountant friend, who told me I was a fool for renting, because "it can only go up," now has an under-water mortgage. If you have owned yours for many years you are probably not under water, but that does not mean that buying was a better financial move than renting. - StaticThunder, on 01/31/2008, -0/+1Then riddle me why, "net worth wise", owning a house generally puts you into a higher wealth category at retirement? Is it just because wealthy people buy houses? Or is it a good savings vehicle for a population that can't seem to stay out of debt?
Also, the people with the crystal balls didn't see this coming, and they certainly don't know when its going to end.
Wah wah wah, home buyers are stupid, look at the bottom 2% of them suffering, typical renter *****. - Locke2053, on 01/31/2008, -0/+1You keep trying to change the issue. It won't work.
Housing prices are falling. People who bought recently made a bad financial move. You are trying to twist my words into "people who bought *at any time* made a bad financial move." That's not what I said.
The long-term trend in housing prices is slightly better than inflation. When we aren't near the top of a bubble, housing is a reasonably good place to direct some of your money. If, like most people, you lack the discipline to invest in the better asset classes (stocks, bonds, CDs), then home ownership is good for you because it forces you to invest, even though it is usually at a low yield and with high expenses.
You keep trying to refute things I haven't said. You have not refuted a single statement I actually made. Personally, I always admit it to myself if I make a bad trade. I do make bad trades. Everyone does. Trying to fool yourself into denial is only going to stop you from becoming a better investor.
If you don't think housing is an investment, then you must be a cash-flow-only type of financial mind. If so, I feel sorry for you because you will have a lifetime of overpayment and credit financing. I bet you have a big loan on your car, too. - StaticThunder, on 01/31/2008, -0/+1Fine, I agree. People who bought at the peak were stupid. Yay for you. They'll still win in the long run. It was stupid if you planned to sell in the next couple years.
You're looking at this the same way you would look at a stock, and they are not the same things at all. Net worth doesn't matter when its all tied up in an illiquid asset!
Keep waiting for prices to get lower, and all that money that could be used to leverage the next up movement is going to waste.
And I'm not changing the subject. Thats a stupid debate tactic that might work on a kindergardner. You're just too biased to understand what I'm trying to tell you, or I'm wrong. That could be too. But I doubt it. Over the long run, a transient downturn like this is meaningless, and I'll ultimately wind up with an asset a perpetual renter won't. They'll blow the money they should be investing on big screen televisions and fancy cars. - StaticThunder, on 01/31/2008, -0/+1I'll add that your debate tactics suck when you make assumptions about me that aren't true. I drive a 12 year old car thats paid off, and I'm driving it into the ground. When it dies, I'll get the cheapest one that will get me where I need to go and I'll probably pay cash. I have no other debt than my house, and I have a diversified portfolio of international stocks, metals, big cap, mid cap, small cap, biotech and bonds, as well as a CD ladder and a savings account.
However, I absolutely HATE landlords, neighbors, crappy fix-it men, and Mexican gardners waking me up at 7:00am with a leaf blower. I'll thank you to let me do all that myself, and paint the walls whatever color I want, retile the floors if I think it needs it. Thats what the money I'm "throwing away by buying" is paying for. The right to do what I want with the property. In the end, its worth it TO ME.
Yes there are better investments than real estate. No *****. - Locke2053, on 01/31/2008, -0/+1I wouldn't call this a "debate" since this is off the front page and it's just you and me talking. It's just a discussion at this point. Also, it isn't fair to claim I made assumptions. I clearly qualified my statement with "if [you have a] cash-flow-only [mindset]."
One more thing you are still getting wrong: "People who bought at the peak ... still win in the long run."
No, they don't. People who rent through the bubble and buy after the correction, all other things equal, win in the long run. You can call that bias if you like, but I call it indisputable mathematical fact.
Making a bad trade doesn't necessarily make a person stupid, and I didn't say that (despite your accusation). If you make a bad trade for stupid reasons, such as dogmatically thinking "it can only go up," then yeah, that's stupid. Learn from it. - StaticThunder, on 02/01/2008, -0/+1No Locke, because there will be other bubbles they will have to ride through. What you are saying about current owners will be just as true about people who buy after the bubble as well. You either recover your equity, or pay more to get in during the next cycle. The only stupid thing one can do is sell to someone at the bottom, and not reinvest the equity in a similar property.The average trend is upward. Its not as good as a good mutual fund, but you get to live in it, and its my personal opinion that it beats dealing with landlords who will kick you out on a whim to do a condo-conversion.
- StaticThunder, on 02/01/2008, -0/+1Lets say you make $50,000 in equity by buying at the bottom and the market peaks again. Are you going to spend it? Or are you going to trade it for another property at the top which is now just as overvalued as the one you bought low has become?
The only way you are actually ahead dollar wise, is if you sell it at the top, go back to renting, and buy again at the next bottom.
So I still maintain that it really doesn't matter. Over my lifetime, a 40k difference in house "worth" is not significant. - Locke2053, on 02/01/2008, -0/+1Over a lifetime, a $40k difference today can balloon into $200k. As Einstein said, compound interest is the most powerful force in the universe. If you think the downsides to renting are so bad you would rather put off retirement for a few years, then you're right. To anyone with a more normal frame of mind, renting through the bubble would be the optimal move, by far.
- StaticThunder, on 02/01/2008, -0/+1Locke, no, that $40k WON'T because its locked up in a non-liquid asset, you don't get to touch that money because its the value of the property on the market. Its only real money if you sell and go back to renting. You're better off trying to get a .5% lower interest rate on the mortgage than worrying about the valuation of the house at the moment.
All it does is say that over the 30 year span of my home-buying investment, I wound up with a house that at SOME time, could have been sold for more than I paid -- if I was going to go back to renting. Otherwise, you're just buying another house at similar value.
Basically, you get slightly more house if you buy now, but it doesn't magically turn into money unless you leave the market. Maybe you get marble countertops and a hardwood floor. - StaticThunder, on 02/01/2008, -0/+1The other thing is, nobody knows the "true valuation" so its somewhat difficult to determine if you are in a bubble or how big of one. I bought about a year before the peak, but I had a rough idea of how overvalued the house was and a rough idea that a correction was coming, but you don't know when. The difference in house value though is nothing compared to the difference in interest rates over the lifetime of the loan.
If you're going to argue its a bad deal, its a bad deal because for a $200,000 house you pay $400,000 of interest. But the interest is in its entirety less than what I would be spending on rent over the same time frame. So now we're down to is owning a house "worth it" in the same sort of way "is owning a big screen TV worth it?" Its a capital purchase, for what is essentially a lifestyle choice.
Some people want to buy. I certainly do. But I guess you're right. I don't see it as a real investment. Thats what my 401K is for. - Locke2053, on 02/02/2008, -0/+1There is no such thing as "fake" money. I don't know else I can explain it. I'll try one more time, using the simplest possible example and real numbers.
Suppose you and your twin brother graduate from college at the same time and move to the same neighborhood. Your parents give you each $40k as a graduation present. You buy a $400k house for 10% down with a fixed, interest-only mortgage (for simplicity) at 6.5%. That's $1,950 in financing per month that you never get back. Your bro rents the identical house next door for $1,333 (using bubble-peak price/rent ratio of 30) which he never gets back.
After thee years, the bubble has popped and property has declined 25% in your neighborhood. At this point, he spent $48k on rent and has no equity. You spent $70k on mortgage financing and have $-60k in equity.
He now buys a house for $300k, so you both own identical houses.
Over the three years, your total balance for living in that house is $-60k(equity) + $-70k(financing) = $-130k. His total balance is $-48k(rent) + $40k(from mom he never spent) = $-8k.
In this example, you now have identical houses and he is ahead of you by $122k, just for renting through the bubble. In other words, if you rented like he did, you would be $122k richer. Your houses will now appreciate at the same rate, but he starts out with a huge lead over you, wich could mean he retires like five years before you.
Play with the numbers... factor in equity pay-down or smaller price corrections... in any case, the bro who rents through the bubble ends up WAY WAY ahead even though he lived in an identical house with an identical lifestyle for your entire lives.
I spent way to much time trying to explain this. I even had to whip out a calculator. I'm done with this convo, so I hope you benefited some from it. If this still doesn't make sense to you, take an intro-to-accounting course or read an accounting book.
Good luck with your finances. - StaticThunder, on 02/02/2008, -0/+1Interest only? What sort of ***** is that then? Thats just renting at a worse rate.
So good deal, invent a situation with a mortgage that is actually FAR worse than renting to prove your point. In my area, rents of a WORSE house, are comparable with the interest payments on a conventional (not interest only) mortgage. In fact, the interest payment is lower after one year, and the difference is turning into (admittedly depreciating) equity. I can come up with similar scenarios, but I don't live in Southern California.
Yeah, if you want to throw money away by renting in a more expensive way, I give, you'll do worse. You win. You're right. My heart is just bleeding over the $40,000 somebody else might have when I retire.
In a more pop-psychology sense, my "smart" brother doesn't generally invest the difference in assets that keep pace with inflation, and doesn't have them to buy later on. Also, as people flee houses that are now seen as a bad investment, rents increase commensurately. Yes, if he's smart he WOULD, but most people don't. I believe YOU could do it. I don't believe people in general DO.
Yes, it is risky. Yes I am somewhat leveraged. Yes other people may do better if they were able to time things just right. I'll just have to content myself with the fact that I really love my house, even if it was overpriced. - Locke2053, on 02/02/2008, -1/+1If you don't understand that the value of a house changes *regardless of how much equity you have in it*, and so an interest-only mortgage does not change the outcome compared to a mortgage with equity payments, then you simply lack the financial understanding necessary to address this topic. I'm sorry. I can't give you an intro to finance course in a digg thread. Like I said, feel free to run the numbers yourself with different factors.
- StaticThunder, on 02/02/2008, -0/+1Fine. I made a HORRIBLE mistake. Thank you for enlightening me. Good luck predicting the bottom so you can make your purchase.
I'm sure you're right. As I said, it's worth it to me, and I didn't have a hell of a lot of choice when the market was going to correct, or when I had to find a place to live. - Locke2053, on 02/02/2008, -0/+1You made a bad trade. I made one yesterday. I sold $10k of stock yesterday when the unemployment report came out that was much worse than expected... yet they rose 2%. That's $200. Ouch for 1 day.
If you bought in late 2006 in Florida, California, or Vegas, and your house was very expensive, and the economists are right, then you really could lose $100k or more. If any of those factors are wrong, you will probably lose much less than $100k... as long as we don't hit an uber-recession like Japan did. I doubt that will happen, so sleep easy :-) - StaticThunder, on 02/03/2008, -0/+1No, its a starter home in a good neighborhood, in an area thats growing rapidly. I estimate its current value from Zillow at about 177k, down from the 204 I paid for it with 40k down because of 2 foreclosures of comparables that the bank sold for $140k. I still owe 159k, but rents in my area are on par with my total mortgage payment and rising steadily (one year ago, one could get a 2 br non-luxury apartment for 700/mo, now its 900/mo). So I'll hold until the market recovers and rent it out if I have to. To rent an equivalent house, I have a friend who is paying 1200/mo, which is 50 more than my total mortage payment (PTI).
So if I had rented, I'd be paying probably 1200 a month right now. Which is why I was arguing with you. But yes, I'm 37k in the hole at the moment with every expectation that once current inventory is used up, it will recover (~18 months).
I could be wrong, I don't have a crystal ball. - StaticThunder, on 02/03/2008, -0/+1Its not like I miss the money I've lost, I still have the house, and for 200k at the time it seemed like a good deal. That money wasn't going to get invested in the first place, it was set aside specifically for a home purchase. If I had waited 2 more years, yeah, it would have been nice, but the market might have collapsed in 5 years, and I'd still be living in a crappy apartment complex paying $900 a month for the privilege and dealing with the drug dealers and illegal aliens. Who knew?
- Locke2053, on 02/03/2008, -0/+1Well, you didn't lose $37k if you lived in the house... to find out exactly how much you are out, you should add the total amount of interest payments you made as losses, then subtract what the cost would have been if you rented a house like yours. That result is what you would have saved if you rented.
It will probably go down more over the next year, but nobody knows for sure. Some optimistic people think we are near the bottom--the price of REIT stocks is finally went up a bit last week.
I'm particularly lucky because where I live, $900/mo gets you a lakeside 1,000 sq ft luxury apartment in an area with zero crime. I'm thinking of moving to the SF bay, so I'll probably have to pay double for an apartment like this. But house values are triple there compared to here, so it's still worth it to rent (for now).
- Locke2053, on 01/30/2008, -1/+9You're wrong. I'll give you a simple example.
- Locke2053, on 01/31/2008, -0/+1If you want to have the best chances of success with your finances, you need to be real with yourself. Recognize and admit it when you make a bad trade, don't try to fool yourself into making a good one. I make bad trades all the time. I bought some stocks today that ended down $300 from where I purchased them. I'm not trying to fool myself into thinking I'm better off without that $300 :-)
- StaticThunder, on 01/31/2008, -0/+1And good lord, you're debating this and yet you're still going to buy? Why? You just almost convinced my that noone should ever buy a house.
Theres no guarantee that five years down the road, this doesn't happen again you know. - StaticThunder, on 01/31/2008, -0/+1Locke, a home is not an investment vehicle unless you are planning on trading it. I'm not, I'm planning on living in it. The question is, am I getting my $1200 a month out of it or not? And I certainly am. The fact that only $800 of that is interest, and that it would cost me ~$1100/mo. to rent an equivalent property in my area, basically says "good deal". Yeah, I may lose a lot of equity. If the market declines 20%, I'll lose about $40,000 when and if I sell. Of course, I'll be buying another home to move into, have excellent credit because the mortgage is my only debt, and I'll just roll that into the next property.
Net worth is meaningless if you can't spend it, and homes are not liquid assets. I'll find out how I did when I cash out in 30 years and retire to Bermuda. On those time scales, home-owners do better on average, but coincidence is not causality.
- StaticThunder, on 01/29/2008, -10/+5Umm... sure. I've got a 30 year fixed at 6.25%, and while I've lost some equity, like most homeowners, I'm deducting the interest payments on my taxes, and since I'm likely just to buy another similar house when I move (at a lower price because of the market), I'm still ahead of perpetual renting and I'll regain my equity when prices come back up in a few years.
- Locke2053, on 01/29/2008, -2/+7I'll add to that sentiment and direct it to the people who told me I was "throwing money away" by renting these past two years. Now you home owners are the ones throwing money away with interest and leverage! Don't worry, you can crash in the spare room in my large, luxury apartment after you get evicted :-)
- StaticThunder, on 01/29/2008, -3/+8And then it will come back up, just as always. People have to live somewhere and there's more of them every year. The trick is holding during the down-times.
The time to buy is when people are saying "real estate will never go anywhere, you're an idiot if you buy." The time to sell is when people say "buy now, you can't lose in real estate!"- sinurgy, on 01/29/2008, -1/+6"Once you see the bandwagon, you're to late"
- rawg, on 01/30/2008, -0/+2As bad as things are now, it'll get worse before it gets better. Right now the banks are still trying to work out deals for delinquent lenders because the last thing they want to do is foreclose on a property. Once the foreclosures start picking up, it'll get ugly.
- skyshock1, on 01/30/2008, -1/+2Great time to buy now though. I'm in the market, and I've basically got my pick of some great homes ULTRA cheap.
- Spero, on 01/29/2008, -13/+0You expect new home sales to drop by more than 52% in two years? If that's the case, you might want to pack your bags ASAP.
- ausfahrt, on 01/29/2008, -14/+3Front page no comments. Trippy.
- ausfahrt, on 01/29/2008, -1/+2Damn. That didn't work.
- Marijuana, on 01/29/2008, -9/+9Expect hard times.
- uziko, on 01/29/2008, -5/+13For who? People that want to buy a home? I'm sick of hearing that *****. It's only bad for people that own homes.
This is very good news for me, and will make "times" for me, very easy. I don't own a home and if I did I would have sold it a long time ago when the real estate market was dropping.- StaticThunder, on 01/29/2008, -5/+7Sure, because you magically knew right when the bottom would fall out, and were in a position to pack up and move to an apartment at that moment. *****. Utter *****. The only people who buy and sell because of market conditions are investors, not home-owners.
- uziko, on 01/29/2008, -4/+1What does an apartment have to do with owning a home?
- uziko, on 01/29/2008, -4/+1*not owning a home
- StaticThunder, on 01/29/2008, -3/+2If you sell your home, you are either moving to another home which is usually also affected by the current market (your next home is cheaper too), making your losses negligible (so its not bad for homeowners), or to an apartment, which is the only way you can really "cash out" your equity instead of borrowing against it.
Unless you're planning on becoming homeless.... I guess thats always an option.
In fact, its good for homeowners, because the cost to upgrade their house is now, relatively lower. The difference in price between house-grades is getting smaller.- uziko, on 01/29/2008, -4/+2i've never owned a home, or lived in an apartment ever
- StaticThunder, on 01/29/2008, -3/+1So you rent a house, its the same thing. Or is someone just magically letting you live on their property?
- Marijuana, on 01/30/2008, -1/+2Uziko, until your finally in the position to own, buy or even rent a home then your opinion is valid. Void until further notice.
- uziko, on 01/29/2008, -4/+1What does an apartment have to do with owning a home?
- StaticThunder, on 01/29/2008, -5/+7Sure, because you magically knew right when the bottom would fall out, and were in a position to pack up and move to an apartment at that moment. *****. Utter *****. The only people who buy and sell because of market conditions are investors, not home-owners.
- trollick, on 01/29/2008, -2/+1Yeah, just thinking about houses becoming affordable again is sending chills along my spine.
- kevdotbadger, on 01/30/2008, -2/+1hehe, hard.
- uziko, on 01/29/2008, -5/+13For who? People that want to buy a home? I'm sick of hearing that *****. It's only bad for people that own homes.
- Look4Truth, on 01/29/2008, -7/+17This is just the beginning. The dollar is crashing and the economy will follow.
http://quotes.ino.com/chart/?s=NYBOT_DX&v=dmax- oldhick, on 01/29/2008, -2/+1Thanks. Very helpful. /s
- 3tcp, on 01/29/2008, -4/+7You're missing about 20 pages of research and analysis after that first sentence in order to come to reasonably come to your conclusion in the second sentence. It doesn't help that you're wrong either, stagnation isn't the same as 'crashing'.
- StaticThunder, on 01/29/2008, -3/+2Sure it will.
- roodammy44, on 01/30/2008, -0/+1I thought the economy started to crash weeks ago.
The dollar, the stock market, house prices.... What more is there to crash?
- RetlawST, on 01/29/2008, -11/+14***** the market, ***** the buyers who would offer ridiculous prices for houses that weren't worth half of that, and ***** the banks who would allow them to do it. Unfortunately it's at the point that we HAVE to do something to help them out or it's just going to screw us over more in the long term.
But, when the time comes that the banks can pay, we sure as hell better make them pay.- FredFredrickson, on 01/29/2008, -1/+6There comes a time when merely posting "***** the _____" on Digg stops doing any good, and you actually have to get up, move away from the computer, and do something about things.
- Drax0n, on 01/30/2008, -0/+3"when the time comes that the banks can pay" *cough* You do realize the banks have been making reccord profits every year. Infact the banks can afford to pay RIGHT now, and the only thing that would happen is their sharer price / profits would drop. But you can't expect them to pay for their own mistakes.. just borrow the money and get the government to fix it.
How the hell can some of the most greedy, (see large atm fees) , profitible buisness get grants and government assistance. Do you americans realise that every year houndreds of millions of dollars are given to exxon in the US? (Note exxons profits are already in the billions each year) and the banks recieve huge tax breaks? Any company that can PROFIT 1 billion + per yeaer does not need government tax breaks and incentives.. but yet their lobbiests make it happen and no one seems to care. - Number23, on 01/30/2008, -2/+3They got flights leaving for Cuba every day, don't let me stop you.
- Spero, on 01/29/2008, -1/+6New news? No.
- ferrariman60, on 01/29/2008, -2/+6Well, don't look at this leading economic indicator, but I think the writing is on the wall (even more). Whatever the government does, we're going into a recession. It will probably be more severe than some, but really now, it's not unhealthy. That's how the business cycle works. It hurts, but it is just part of the economic cycle. Of course, the whole mortgage crisis thing really didn't help. ARMs are a bad idea, people. Don't do it unless you have the ability to convert at any time to a fixed rate.
- Number23, on 01/30/2008, -1/+3Durable order were up 5% in December, that's hardly recessionary.
- bjornski, on 01/30/2008, -1/+2That helps people making certain durable goods. Everyone else? Not so much.
- StaticThunder, on 01/30/2008, -2/+1Durable goods includes business equipment and factory machines; ie., things used to make other things. Its VERY good.
- bjornski, on 01/30/2008, -1/+2That helps people making certain durable goods. Everyone else? Not so much.
- Number23, on 01/30/2008, -1/+3Durable order were up 5% in December, that's hardly recessionary.
- djdavey, on 01/29/2008, -1/+13This is news? I knew this when my neighbor jumped out of his 3rd story window last week.
- StaticThunder, on 01/29/2008, -2/+2Yeah, that sucks because health-care prices are still increasing. Did he have insurance?
- clak, on 01/29/2008, -16/+2Microsoft Fanboy: No, I refuse to believe this. Only Apple is in trouble right now.
- FredFredrickson, on 01/29/2008, -3/+6Apple IS in trouble right now.
- liquisoft, on 01/29/2008, -2/+14Like they say, it's a buyer's market.
Which means that there are so many idiots who bought houses they couldn't afford there is a surplus of homes for sale, and very few people actually willing to go to the bank and try to get a ridiculous loan so they can buy a home they can't afford.- crapmatic, on 01/30/2008, -4/+2In my zip code, housing inventory has shrunk from 165 homes to 113 homes since September. I don't know what planet most of the country lives in, but it's definitely not a buyer's market here.
- TypeEE, on 01/30/2008, -0/+1There are always exceptions. Good school district? No new houses built?
- StaticThunder, on 01/30/2008, -0/+2People taking properties off the market because prices have fallen too far. They'll hold them, rent them, and wait for things to get better.
- darkcthulhu, on 01/30/2008, -0/+1Earth.
- TypeEE, on 01/30/2008, -0/+1There are always exceptions. Good school district? No new houses built?
- crapmatic, on 01/30/2008, -4/+2In my zip code, housing inventory has shrunk from 165 homes to 113 homes since September. I don't know what planet most of the country lives in, but it's definitely not a buyer's market here.
- puter, on 01/29/2008, -1/+18They'll just have to stop giving out sub-prime loans, and bring housing prices back to a reasonable level. What do they expect when a middle class family has to get a sub-prime loan to buy a middle class home, and pay more than it's worth. I feel sorry for those who bought houses that are going to come down in worth because they paid more than the house is worth in the first place. They get the option of selling their house for a loss or holding onto a bad investment
- norman619, on 01/29/2008, -6/+6This is what they would call a market correction. When I was thinking of buying a home 7 years ago a buddy of mine who's in realestate told me not to buy. He pretty much told me this was comming and that I should wait. I'm so glad I did.
- simile, on 01/29/2008, -4/+5Much better to give rent to a landlord for 7 years...
- kingmanic, on 01/29/2008, -1/+5He's on Digg. Better then even odds he lived in his mums basement for 7 years.
- puter, on 01/30/2008, -0/+1Actually it is much better to give rent for 7 years.
rent is about half the cost of owning a house (if not even less). You take that other half and invest it. Otherwise you would have spent that money on a house payment for a house that is not worth what you paid. Which do you think is the wiser investment? - StaticThunder, on 01/31/2008, -0/+1puter, I don't know what you think interest rates are, but that might be true for Southern California. In many areas, rents are comparable to mortgages, and in those markets it absolutely makes sense to purchase if you are going to live there for a while.
Besides which, I know for a fact that the average renter doesn't invest the other half. He spends it and racks up $20k in credit card debt. So while theoretically, you might be better off renting, equity is a nice way of doing some long term saving.
- StaticThunder, on 01/29/2008, -1/+12Seven years ago you would have made a killing as the value of your home appreciated up through 2006 (some markets more than others). Even now you'ld STILL be way ahead for buying in 2000/2001. So be sure to thank your friend for his bad advice.
- simile, on 01/29/2008, -4/+5Much better to give rent to a landlord for 7 years...
- FredFredrickson, on 01/29/2008, -0/+2I don't feel sorry for them at all. They knew what they were buying wasn't worth that much, and they took the risk of buying when they did.
- norman619, on 01/29/2008, -6/+6This is what they would call a market correction. When I was thinking of buying a home 7 years ago a buddy of mine who's in realestate told me not to buy. He pretty much told me this was comming and that I should wait. I'm so glad I did.
- RuthlessPirate, on 01/29/2008, -0/+1I always see these "new home" figures and wonder how the re-sell market is doing. Maybe people are just buying "used" homes instead?
- StaticThunder, on 01/29/2008, -0/+1Its not as bad, but its still way down from the peak in 2005/2006.
- Tenareth, on 01/30/2008, -0/+1The key is that the GDP isn't affected by used homes, it only takes into account new homes.
- macman2k, on 01/31/2008, -0/+1Used homes have debt on them that limits what the sellers can sell for if they bought in the past 3 or 4 years or have refinanced their "equity" out of the place. Builders can undercut used homes for a long time (so long as they bought the land years ago). Builders who bought to much land are getting screwed because land has fallen much faster than everything else.
- bigsquirrely, on 01/29/2008, -5/+4Can you hear that? .......its the recession train a commin....
- norman619, on 01/29/2008, -3/+5It's already here. People (and our gov) are just in denial.
- StaticThunder, on 01/29/2008, -4/+4The word "recession" has a technical meaning, and doesn't respect your feelings about the market.
We *might* be headed INTO a recession, but we are not in one currently.
- StaticThunder, on 01/29/2008, -4/+4The word "recession" has a technical meaning, and doesn't respect your feelings about the market.
- Number23, on 01/30/2008, -1/+2Is that why durable order were up 5% in December?
Dolt.- bjornski, on 01/30/2008, -1/+1Again, that's one portion of the market. It helps those that make those specific durable goods.
That's like saying the economy is doing great because Exxon made a bigger profit this year than last.- StaticThunder, on 01/30/2008, -1/+2No, its saying people are buying things that they expect to be using some time in the future, which is not a sign of a failing economy.
- bjornski, on 01/30/2008, -1/+1Again, that's one portion of the market. It helps those that make those specific durable goods.
- norman619, on 01/29/2008, -3/+5It's already here. People (and our gov) are just in denial.
- itsbob, on 01/29/2008, -6/+2F@ck NYT, I don't want to give you my info to read what you feel is news
- norman619, on 01/29/2008, -1/+4HINT: Google the title and you will find the same information on other sites.
- londubh, on 01/30/2008, -0/+2Use bugmenot http://www.bugmenot.com/ They even have a firefox add-on https://addons.mozilla.org/en-US/firefox/addon/634 ...
- bjornski, on 01/30/2008, -1/+1Just enter ***** info. It's not like they can verify it.
- neiltc13, on 01/29/2008, -12/+2Inaccurate. Sales of new homes in a tiny section of the world fell by 26% in 2007, not all homes.
- aliengoods, on 01/29/2008, -1/+4You're right, and that tiny section of the world is called the US, which is why the article appeared in the New York Times. Got it?
- OrangeTide, on 01/29/2008, -1/+3The US is not exactly a "tiny section of the world". Physically it is twice the size of the EU. Although the population is 4th after India and EU.
Too bad for you that the US's economy is tightly coupled to pretty much every nation in the world that produces things. A US depression would result in a worldwide recession. (at that point everyone can give up on global warming, because we won't be able to do anything about it until it is too late)- neiltc13, on 01/30/2008, -1/+1That still doesn't make the original submitter's title and description accurate.
- norman619, on 01/29/2008, -0/+2Are peopel really surprised by this?
- d3dm, on 01/29/2008, -3/+17OMG! What will all the illegal alien carpenters and sheetrockers do now?
- petrodollar, on 01/29/2008, -2/+12Help combat soaring food prices by picking lettuce for $0.25/hr.
- swiftheart, on 01/30/2008, -0/+1Finally figure out how to outsource like the Indians have.
- SuperGhost, on 01/29/2008, -0/+8Quit acting like the recession is coming... it's already here. Really though... I have a family friend who purchased a $450,000 house - they're gonna drop it like it's hot and buy another smaller home before their credit takes a hit. ARM for the lose!
- petrodollar, on 01/29/2008, -1/+2The IMF is projecting that US economic growth will slow from 4.9 to 4.1% in 2008. That's not much of a recession.
- twomeyw23334, on 01/30/2008, -2/+2A recession is negative growth (not declined growth) for at least 2 consecutive quarters, so we are definitely not in a recession. The media just loves to shove this down our throats. Terrorist attacks, global warming, recession, 4" of snow tomorrow, there is always something we need to be totally freaking out about.
- Tenareth, on 01/30/2008, -1/+0lol, the 4" of snow... any chance you are in WA and woke up to find out the "Worst storm ever" didn't happen?
- TypeEE, on 01/30/2008, -0/+1well, at least that's how intrade is defining the recession. 2 consecutive quarters of decline in GDP. Intrade hasn't end the contract of 2008 recession yet, so US is still not considered to be in recession according to intrade contract rule.
- S3Captain, on 01/29/2008, -0/+3(sarcasm here) It's not like we've been overbuilding at all right? (/sarcasm here)
The Pretenders had it right: "I went back to Ohio and my pretty countryside had been paved down the middle by a government that had no pride".
Not to be a Monday morning QB, but I've long wondered how many mcmansions could be built before demand dried up. I guess I can stop counting.- petebot, on 01/29/2008, -0/+5Yeah, I was thinking the same thing about condos in Chicago...there are new ones still being built on just about every other corner.
- petrodollar, on 01/29/2008, -1/+3And yet a surprising number of those new developments in the south loop are 80-90% sold.
- fokov, on 01/29/2008, -0/+1GA here, and they are still building cloned Town Houses here (1000s of them) while we just had a head line stating over a billion already in foreclosures. The over population and drought are putting a strain on our water supply and they just keep paying Mexicans to rip down trees and build more empty houses. (The Mexican comment isn't racist, I am living within feet of an extension of a house being built by them.)
- petebot, on 01/29/2008, -0/+5Yeah, I was thinking the same thing about condos in Chicago...there are new ones still being built on just about every other corner.
- protodon, on 01/29/2008, -1/+14Don't worry guys, I watched the State of the Union address and everything's fine. Then I went and sold my house for some magic beans!
- choopie911, on 01/29/2008, -0/+8Considering housing went up 99% in the last 10 years here in BC, I couldn't be happier to hear this :D
- andy3109, on 01/29/2008, -0/+3In tons of cities housing prices were going up 50% a year!!! Thank god they are going down. 25% loss = nothing compared to how much they went up from 2002-2006
- AussieJames, on 01/29/2008, -11/+3I foresee The Great Depression
Part Deux- dan222555, on 01/29/2008, -2/+6Prophecy is not for you, don't quit your day job.
- theutopian, on 01/29/2008, -3/+4There are a lot of striking similarities between the 'roaring 20's' and the economic problems of now.
- dan222555, on 01/29/2008, -2/+3And those would be....?
- theutopian, on 01/30/2008, -1/+4The 20's saw the rise of large amounts personal debt. Stock market speculators bet big on risky investments that crashed. The government created a lax regulatory environment for business. International trade decline. Decline in the value of the dollar. Mass inequality of wealth and income amongst the classes. Could easily be applied to today as well at the 20's.
- dan222555, on 01/30/2008, -4/+1Except none of those are happening right now, besides the declining dollar (and the circumstances now are completely different than they were then). Not to mention the hundreds of other factors you didn't mention that went into causing the Great Depression that just aren't happening today.
If you really think what you listed above is happening today you ought to be able to produce some statistics to back those things up. I suspect you'll have a hard time doing that though. - theutopian, on 01/30/2008, -1/+2Foreclosure's are at a record high. People are defaulting on their debt obligations in larger numbers than usual. Banks are losing billions of dollars on dodgy investments. We've shipped all our manufacturing jobs overseas. The gap between the rich and the middle classes has grown to stratospheric heights while the rich engorged themselves on the sub-prime boom. The Bush administration has created a lax regulatory environment subjective to whom has the most friends in the administration. I could go on and on.
- bjornski, on 01/30/2008, -2/+2@theutopian
Don't bother going on and on. Until Limbaugh and Hannity blame it on the Democrats, dan and his ilk won't admit any of those things are happening. - theutopian, on 01/30/2008, -1/+2@Bjornki:
I know... I know... you're right. He was just pissing me off... :) - dan222555, on 01/30/2008, -2/+1Why would I admit it's happening when you haven't shown me a single statistic that proves it's happening? All you have is dramatic rhetoric, until you show me statistics that show our current economic situation is comparable to that of pre-Great Depression times, I'm not gonna believe such ridiculous crap.
- dan222555, on 01/30/2008, -4/+1Except none of those are happening right now, besides the declining dollar (and the circumstances now are completely different than they were then). Not to mention the hundreds of other factors you didn't mention that went into causing the Great Depression that just aren't happening today.
- theutopian, on 01/30/2008, -1/+4The 20's saw the rise of large amounts personal debt. Stock market speculators bet big on risky investments that crashed. The government created a lax regulatory environment for business. International trade decline. Decline in the value of the dollar. Mass inequality of wealth and income amongst the classes. Could easily be applied to today as well at the 20's.
- dan222555, on 01/29/2008, -2/+3And those would be....?
- diggdiggerid, on 01/29/2008, -4/+1I'm not sure why this is a problem? How many homes are "supposed" to be sold every year? So less people want to buy or waste their money on something they don't need, ok, that's their preference. And for those that do want to buy, they can, with lower prices.
- dan222555, on 01/29/2008, -1/+1People don't need homes?
- Drax0n, on 01/30/2008, -1/+1Of course not silly. Just put up a webpage on the internets tubes and call it your home. BAM done.
- diggdiggerid, on 01/30/2008, -1/+2They don't need multiple homes and they don't particularly need new ones. I'm not saying people should live in the streets, but it's a good thing that people are looking at their finances and seeing that they might not be able to afford something instead of trying to buy it anyway, which would only lead to trouble
- dan222555, on 01/30/2008, -0/+1I agree that people shouldn't buy homes they can't afford, but people need to buy homes. You can't expect people to live with their parents their entire lives.
- dan222555, on 01/29/2008, -1/+1People don't need homes?
- shcotttty, on 01/29/2008, -2/+6I guess people don't like to buy houses when the economy is crashing/we are in war/our gov't doesnt give damn about us...who woulda thought - ill keep livin w/ my pops
- OrangeTide, on 01/29/2008, -0/+3More likely people don't want to buy a house when nobody will extend obscene amounts of credit to us anymore. Median home price is 720K where I live, I don't think it's practical to get a loan for 5x my salary to buy a house. And apparently neither does anyone else.
- heystoopid, on 01/29/2008, -2/+32012 the big one !
- JimmyIkon, on 01/29/2008, -1/+12000 didn't really work out for you did it.
- FredFredrickson, on 01/29/2008, -4/+6The recession is already here... the news is just trying (unsuccessfully) to talk the country out of it. I say bring it on. Things are too expensive these days, and people are buying too much useless *****.
- skinjob1, on 01/29/2008, -3/+4I agree a recession is most likely here already. I think the only question is will we still be in a recession 6 months from now. I say no but inflation is still going to be a problem moving forward.
- dan222555, on 01/29/2008, -7/+3How can a recession be "most likely here already"? It's either here or it isn't (and right now it isn't). Recession is not some abstract economic concept.....it has a very specific meaning. Look it up for christ's sake.
The ignorance is blowing my mind.- FredFredrickson, on 01/29/2008, -2/+4Recession may be defined as a concrete idea as a word, but in reality there are different degrees of economic prosperity. This isn't a black and white world we live in, dan.
- Misogyny, on 01/30/2008, -2/+3Do you think there's some indicator light somewhere marked "recession" that suddenly blinks on? There can absolutely be a lag between a recession's onset and the data indicating one. Perhaps you are the ignorant one here.
- dan222555, on 01/30/2008, -2/+2There is an indicator....it's called the GDP. And there are people in the government that track it in real time looking for indication of a recession.
- bjornski, on 01/30/2008, -2/+1The way the GDP numbers are figured, along with the incredible disparity between the upper and lower income brackets, it's really becoming less and less relevant every time it's revised.
Let's see, economic indicators dont' take food or fuel into account anymore, or health care. Let's cut a few more numbers out of there, and our GDP will go through the roof! - bjornski, on 01/30/2008, -2/+1@bjornski (bleh, correction)
I was thinking the CPI.
But still, the way numbers are being fudged with "Enron math" nowdays, most of the numbers being displayed for public consumption are totally misleading. Just because CEO income went up 400% in the last few years, doesn't mean that it's getting better for everyone else around/under them.
"We're making more money!" No. A few people at the top are. At the expense of the people who buy imported goods they used to make here, while working their new "service industry" jobs.
GDP numbers are almost meaningless now, when you take more than just the sheer number of dollars into account. You also have to take into account WHO has those dollars. And every year, they float higher and higher up the food chain, never to be "trickled down" upon the peons.
- petrodollar, on 01/29/2008, -3/+3"inflation is still going to be a problem moving forward."
link?- FredFredrickson, on 01/29/2008, -2/+4Link to what? Haven't you seen the hundreds of news reports as of late detailing the declining value of the dollar?
- petrodollar, on 01/29/2008, -3/+2That's not the same thing as inflation, *****. Why don't you explain to us why inflation is currently a "problem" and why it is "still going to be a problem" in the future. Links to ronpaul.com don't count.
- FredFredrickson, on 01/29/2008, -2/+3For the last ***** time, I am not a Ron Paul supporter. I'm not even a goddamned conservative.
Inflation is *always* a problem for the future. It means the money you make it worth less, and that's a huge problem when the amount of money paid per job does not rise, while the cost of living does.
Here's the definition of inflation. Pay attention to the last part: "Economics. a persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency (opposed to deflation)." - dan222555, on 01/29/2008, -2/+4Inflation can cause a currency to drop but experts will tell you that's not what's going on right now. The dollar falling has more to do with a trade deficit and the US government's debt and budget deficit.
- StaticThunder, on 01/30/2008, -1/+2Moderate inflation is A GOOD THING. It keeps unemployment low, and beats the hell out of deflationary spirals. What people are worried about is stagnation, and THAT hasn't happened yet.
- petrodollar, on 01/30/2008, -4/+2"substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency"
Hey, great! Unfortunately for you that's NOT what's currently happening. The current devaluation of the dollar is distinct from what you describe, and is being caused by economic phenomena most likely beyond your comprehension.
Your ***** argument implies that the prices of consumer goods and services have shot up 50% since the dollar declined against the Euro by approximately that much? - bjornski, on 01/30/2008, -0/+1Since they stopped publishing the M3 numbers, it's really hard to show numbers on either side.
They stopped publishing those numbers to hide some bad, bad trends in the economy.
"We don't need to tell you how many dollars we print!" - petrodollar, on 01/30/2008, -1/+2"We don't need to tell you how many dollars we print!"
Care? It's perception that counts. - bjornski, on 01/30/2008, -0/+1And the perception is that they're hiding things.
- FredFredrickson, on 01/29/2008, -2/+4Link to what? Haven't you seen the hundreds of news reports as of late detailing the declining value of the dollar?
- dan222555, on 01/29/2008, -7/+3How can a recession be "most likely here already"? It's either here or it isn't (and right now it isn't). Recession is not some abstract economic concept.....it has a very specific meaning. Look it up for christ's sake.
- dan222555, on 01/29/2008, -6/+7Since I'm assuming you're not an economist, find me one real economist that says "the recession is already here".
Or don't even bother because you won't. Recession isn't just a word you throw around for dramatic effect in economics. It has a concrete meaning....do us a favor and look it up.- FredFredrickson, on 01/29/2008, -4/+3re·ces·sion
–noun
Economics. a period of an economic contraction, sometimes limited in scope or duration.
Title of article: Sales of new homes fell by 26% in 2007
Sounds like recession to me, Mr. linguist.- dan222555, on 01/29/2008, -4/+5A slump in the housing market doesn't amount to economic contraction. Economic contraction implies shrinking of the GDP....that's not happening---we're not in a recession.
The challenge is still open for you to find one economist who claims we're currently in a recession. - FredFredrickson, on 01/29/2008, -3/+2I don't need an economist to tell me which way the wind is blowing. The dollar is declining, sales for just about everything are down. You can bitch and moan about the definition of words all you want, and challenge a random person on the internet to do whatever you feel like, but they wouldn't be trying to pass an economics stimulus package if we weren't in trouble.
- dan222555, on 01/29/2008, -4/+3No one's denying the economy is not in great shape. But the point is we're not in a recession. A recession is a serious economic event---much more serious than what we're experiencing right now. For you to go around claiming "the recession is already here!" when it very clearly isn't is dishonest, and I'm not going to let it go without pointing out that fact.
- dan222555, on 01/29/2008, -4/+5A slump in the housing market doesn't amount to economic contraction. Economic contraction implies shrinking of the GDP....that's not happening---we're not in a recession.
- StillAnonymous, on 01/30/2008, -1/+2We *could* be in a recession, but you can only definitively tell in hindsight once it's happened. It's looking bad though... real bad..
http://www.telegraph.co.uk/money/main.jhtml?view=D ...
- FredFredrickson, on 01/29/2008, -4/+3re·ces·sion
- petrodollar, on 01/29/2008, -7/+9STFU. The only people saying were in a recession are ron paulbots who didn't have jobs to begin with.
- FredFredrickson, on 01/29/2008, -1/+3I ain't no Ron Paul supporter... I just think that's it's time to start facing reality. We over-extended ourselves, and now we just have to bounce back. Ron Paul isn't the answer - we just have to wait for things to balance themselves, which they will.
- andy3109, on 01/29/2008, -5/+2Expensive? have you looked at the CPI over the last 20 years? Please revise your statement you idiot.
- petrodollar, on 01/29/2008, -4/+3Careful, he'll tell you that the CPI doesn't measure food and energy prices or some such nonsense.
- bjornski, on 01/30/2008, -0/+1Those things SHOULD be factored in. It's not like they're luxury items that people can do without.
- petrodollar, on 01/29/2008, -4/+3Careful, he'll tell you that the CPI doesn't measure food and energy prices or some such nonsense.
- freezeout, on 01/30/2008, -0/+3careful now, the last person who said "bring 'em on" got way more than he bargained for and so will you. prepare to be sodomized by inflation
- skinjob1, on 01/29/2008, -3/+4I agree a recession is most likely here already. I think the only question is will we still be in a recession 6 months from now. I say no but inflation is still going to be a problem moving forward.
- DarkReign16, on 01/29/2008, -4/+1There's only one man who can stop this. And his name is Superman.
- betobeto, on 01/29/2008, -0/+2I guess you really meant Chuck Norris.
- DarkReign16, on 02/04/2008, -0/+1It was supposed to be a friendly joke about RP. But it went way over everyone's head due to my failed wording.
- betobeto, on 01/29/2008, -0/+2I guess you really meant Chuck Norris.
- Rufunki, on 01/29/2008, -0/+8Housing prices double, triple and quadruple what they were just 5 years ago, they then wonder why the housing prices drop. I for one am happy to see the market finally start balancing it's self out. There isn't a shortage of buyers, just a shortage of stupid buyers in a position to buy again (all being foreclosed on)
- mcduckov, on 01/29/2008, -1/+1median home prices actually rose a bit in 2007. How much this will hit the national economy is still an open question.
- Tenareth, on 01/30/2008, -0/+0The economy got addicted to crazy inflation... Economies should not require inflation if you don't use so much outrageous credit. The only reason people are freaking is that prices on things like housing are finally getting under control.
- petrodollar, on 01/29/2008, -1/+6It's good for the U.S. economy to shake off the dead wood now and again. So the know nothing speculators, market timers, and stock pickers got whooped -- GOOD! Efficient markets killed the quant funds. Eugene Fama should run for president.
- macman2k, on 01/31/2008, -0/+1after you shake off the dead wood, there isn't much left to our economy.
- chrisinsocalif, on 01/29/2008, -0/+1The housing market will have trouble for at least 2 more years when many of those horrible ARM loans no longer Exist.
- petrodollar, on 01/29/2008, -1/+2ARMs make sense in some situations. Just not when interest rates are already know and/or you plan on LIVING in your home for any length of time.
- nastronomical, on 01/29/2008, -0/+7So basically people who cannot afford a home arent buying one! So the market is correcting itself!
btw folks read this
http://afp.google.com/article/ALeqM5jCC-iZOxHuYLWk ...- andy3109, on 01/29/2008, -0/+2Correct and thank you.
- fokov, on 01/29/2008, -1/+01) more minorities have lower income so they are more apt to missing a payment. 2) most people living paycheck to paycheck don't sacrifice someone useless like a 42" plasma TV with 400 cable tv package for a little while to create a buffer in times of inflation. 3) no one put a gun to their head to buy a $300,000 home. When I grew up the house costed $68,000 and every room and multiple people sleeping in it. My father didn't buy a new house until we moved and he got a better job because he was smart enough to live within his means and just dealing with it.
- Wargalas, on 01/29/2008, -2/+25And those of us who played it conservatively, got fixed mortgages, didn't over extend ourselves, and more, are now sitting pretty. Those of you who bought houses you couldn't afford, got wild mortgages, or didn't plan on even dumb things like losing your job, this is going to sound harsh, but sell your place, move into an apartment, and chalk it up to a valuable life lesson learned.
The government doesn't owe you anything. The mortgage companies aren't owed anything. The government wouldn't do anything if interest rates stayed low and people got to keep their McMansions, so why should they do anything when you made a bad financial decision?
Me personally, I'm looking for an upgrade. I doubt severely that I'll be able to sell in this market, however, houses that were once out of reach, are now easily within reach.
Sorry guys, but you deserve nothing but a harsh fiscal lesson.- swiftheart, on 01/30/2008, -1/+2I don't disagree with the overall sentiment of your comment. However, you're saying that you (and others who made good decisions) are "sitting pretty" when I think it's obvious that we all will be enduring harsh fiscal lessons caused by others stupidity.
Does that mean people should be bailed out? Hell no. But I don't see any particularly reason for being smug. This situation is too big and the economy too interconnected for that.- Wargalas, on 01/30/2008, -0/+1If you invest conservatively, you won't be enduring anything. As for the smugness? Sorry, I was trying to fit in here at Digg. :) I don't own a Mac, so I thought that would be the next best thing. :)
- swiftheart, on 01/30/2008, -0/+0Well, even the most conservative investor will endure higher property taxes. Silly local governments built their budgets around the increasing property values so the dropping property values will cause them to increase property taxes.
I thought your Mac/smug thing was pretty funny. :)- Wargalas, on 01/30/2008, -0/+1Thanks!
- swiftheart, on 01/30/2008, -0/+0Well, even the most conservative investor will endure higher property taxes. Silly local governments built their budgets around the increasing property values so the dropping property values will cause them to increase property taxes.
- Wargalas, on 01/30/2008, -0/+1If you invest conservatively, you won't be enduring anything. As for the smugness? Sorry, I was trying to fit in here at Digg. :) I don't own a Mac, so I thought that would be the next best thing. :)
- swiftheart, on 01/30/2008, -1/+2I don't disagree with the overall sentiment of your comment. However, you're saying that you (and others who made good decisions) are "sitting pretty" when I think it's obvious that we all will be enduring harsh fiscal lessons caused by others stupidity.
- nullcodes, on 01/29/2008, -2/+2http://en.wikipedia.org/wiki/Homeownership_in_the_ ...
In 2004, the home ownership rate was higher than it has ever been in history. I don't know the current numbers, but surely it hasn't changed drastically from that level. So it appears the overall trend is more people owning their home, there is nothing to get panicked about at this point. Home ownership rates should rise again.- macman2k, on 01/31/2008, -0/+1You mean more people renting money from the bank? The concept of ownership is totally lost on our society today. Home ownership rates only went up because lending standards went down. Lending standards will over correct and require 25% down which will reduce those who are able to buy to well below the long term average ownership rate. This number is a sign of POTENTIAL energy that will have to settle out before this depression is over.
- nullcodes, on 01/31/2008, -0/+1Banks will let the homes sit empty if people dont make their mortgage payments? No they will sell them cheaper. Sure they will kick the current occupants out .. but they will sell it to someone else for a low price. So how can the home ownership rate collapse .. Since the banks actually own the homes .. they will have to get rid of it somehow .. meaning they will sell it at prices people can afford. So worst case the home ownership rate stagnates or declines SLIGHTLY.
- macman2k, on 01/31/2008, -0/+1You mean more people renting money from the bank? The concept of ownership is totally lost on our society today. Home ownership rates only went up because lending standards went down. Lending standards will over correct and require 25% down which will reduce those who are able to buy to well below the long term average ownership rate. This number is a sign of POTENTIAL energy that will have to settle out before this depression is over.
- Abennobashi, on 01/29/2008, -1/+3We should give everyone VERY easy credit based on 7 year increments in pay to give the the illusion that they can afford a house!
..wait - StaticThunder, on 01/29/2008, -5/+7I really don't think a market correction at this point is a bad thing. People who are losing homes generally had no business buying in the first place,and people who are waiting until the "perfect moment" to buy are people who will never buy in the first place -- because you don't know when its going to hit bottom, or when its going to turn around.
All those people hoping the market tumbles so they can finally buy a house are either the ones who will make it turn around, or the ones who will never be able to afford a down payment in the first place, and think somehow, magically, they'll be picking up houses for the price of a used car.
Real estate recessions don't look like normal ones... below a certain price, people take their homes off the market and hold them or rent them. Supply becomes inflexible.- uziko, on 01/29/2008, -1/+3Uh, dude people that can only afford to spend 100K on a house will be able to buy one when the price of a decent house drops to 100K.
- StaticThunder, on 01/29/2008, -5/+2Which will not happen for the reasons I mentioned. Noone is going to sell their home for half of what they paid for it, and all the people waiting for prices to fall that low will push prices back up. Its a dynamic system.
You'll see prices fall a bit further from another ARM reset and round of foreclosures, and thats it. If you're waiting to buy your first home, your best bet is probably third quarter this year.- uziko, on 01/29/2008, -2/+3I don't know what the actual number is that houses are going for or will drop it was an example.
My point is that I don't know wtf you were trying to say, but the fact is that when house prices drop it means good news for people that are buying homes.
Bases on the jumble of nonsense you wrote above it's hard to tell but it looked like you were saying that house prices dropping were not good for buyers. - StaticThunder, on 01/29/2008, -4/+1If you can't understand what I wrote, you have no business buying a house in the first place. There is a floor on prices, at which point people will no longer be willing to sell.
- uziko, on 01/29/2008, -1/+2If you can't put together a comment that isn't *****, then your a dumbass.
- StaticThunder, on 01/29/2008, -4/+2I stand by my other comments. You're an idiot.
- uziko, on 01/29/2008, -2/+3I don't know what the actual number is that houses are going for or will drop it was an example.
- StaticThunder, on 01/29/2008, -5/+2Which will not happen for the reasons I mentioned. Noone is going to sell their home for half of what they paid for it, and all the people waiting for prices to fall that low will push prices back up. Its a dynamic system.
- Number23, on 01/30/2008, -1/+1You're mostly right. The time it buy is when inventory stabilizes. Right now it's still increasing so there's more pain to come.
- sgiffy, on 01/30/2008, -0/+1Agreed. The thing is that most people are doing just fine owning the houses they do. They are not going to sell for a lose only to rent for slightly less than their mortgage.
Beyond that while supplies are a bit high, they are not that high. Do you see massive ghost towns of empty houses, are condo complexes sitting empty. Nope.- StaticThunder, on 01/30/2008, -0/+2Depends where you look, but not my market. There are foreclosures, mostly people who bought investment properties they couldn't afford, but its nothing like a ghost town. As long as people are coming here to work, the inventory will get used up.
- uziko, on 01/29/2008, -1/+3Uh, dude people that can only afford to spend 100K on a house will be able to buy one when the price of a decent house drops to 100K.
- jetblackz4, on 01/29/2008, -1/+14Hopefully we will not be bombarded with House flip shows anymore. I am so sick of them....
- crapmatic, on 01/30/2008, -0/+2Guess we're about due for a Repo Man show.
- skyshock1, on 01/30/2008, -0/+2Especially when these pompous ***** appraisers come in and tell them their $200k house is worth $750k; when they know damn well a home is only worth what someone else is willing to pay for it. And right now, NOBODY is willing to pay these ridiculous prices.
- KingGorilla, on 01/29/2008, -1/+9Yay I can afford to buy a house soon
- jonahr, on 01/29/2008, -0/+1Imagine if all housing included all of their own systems. Imagine if houisng was a secure investment, imagine if these homes were totally sustainable and independent? I highly recommend you all check out earthships...
http://www.earthship.net- moontime, on 01/30/2008, -0/+1We plan to build an underground home and have a self-sufficient homestead if our house ever sells. Earthships are cool too.
- uziko, on 01/29/2008, -3/+4Why does everyone keep associating not owning a house with living in an apartment. There is zero correlation between the two. I have never owned a house, and I have always lived in a large nice house in a nice area.
- StaticThunder, on 01/29/2008, -5/+3Most people don't get to leech off of someone else's good will. Be sure to thank whoever is letting you live in their house without paying rent. Renting a house is the equivalent of an apartment, for the purpose of discussions like these.
You are either renting, or you are owning. The apartment is just an example.- uziko, on 01/29/2008, -4/+2House: http://en.wikipedia.org/wiki/House
Apartment: http://en.wikipedia.org/wiki/Apartment
Now your associating living in a house with not paying rent. What inaccuracies are you going to come up with next?- StaticThunder, on 01/29/2008, -5/+2Uziko, you're being an idiot. Quit playing semantic games with me when I waste my time explaining that by apartment I meant "renting". A "home" isn't a "house" either but you don't see me bitching about it.
- uziko, on 01/29/2008, -4/+2House: http://en.wikipedia.org/wiki/House
- fokov, on 01/29/2008, -4/+1Most people do not rent houses. However, they are usually better for the $ wasted in renting (my opinion)
- PoopStick, on 01/29/2008, -3/+5right and you are paying the owners house payment
- uziko, on 01/30/2008, -3/+2Actually, buying a home is only worth it if you put a large down payment on it or don't finance it. If you finance it with no money down, almost all of your money is going to the bank in interest and not to paying off your home. Also if the value of the home is going down it's also not worth it. Buying a home is good in some situations but not all.
- Tenareth, on 01/30/2008, -2/+1If you finance it for a lower interest rate than you can make on the same money it is worth it. i.e., if you could buy the house with cash, it is better to finance it at 7%, then make 10%+ with the rest of the money. However, most people don't quite understand how money really works, and just calculate if they can "afford" it.
- uziko, on 01/30/2008, -3/+1if you can buy the house with cash, it's better to finance? do know what finance means? go back to school
- sgiffy, on 01/30/2008, -0/+1Yes, just like he said. Lets say you have 100k. You could buy a 100k and get 10k a year in appreciation. However you could also put that 100k in some other investment turning 10% a year and borrow 100k to buy said house. You pay 5-7% interest on the loan, and still get your 10% appreciation for a net of 3-5% a year. Couple that with you 10% on other investmetns and your getting more for your money. This is a bit over simplified, but not too off the mark.
The trade off is heightened risk. In the first scenario regardless of what happens you have a free place to live. In the second you could conceivably lose your invested money and have your house depreciate.
- Tenareth, on 01/30/2008, -2/+1If you finance it for a lower interest rate than you can make on the same money it is worth it. i.e., if you could buy the house with cash, it is better to finance it at 7%, then make 10%+ with the rest of the money. However, most people don't quite understand how money really works, and just calculate if they can "afford" it.
- macman2k, on 01/31/2008, -0/+1actually, the mortgage payment on the house I am renting would be $1800 per month + HOA / Maintenance / Taxes. I am paying $1200 per month and putting $600 in the bank. Mean while the owner is taking loss as the value of the property falls by $1000 per month in addition to the $600 negative cash flow.
- StaticThunder, on 01/31/2008, -0/+1He must think A) he's going to make it all back or B) what he's going to ultimately lose is not worth as much as destroying his credit for 7 years.
Make sure you actually bank the $600 instead of blowing it on hookers.
- StaticThunder, on 01/31/2008, -0/+1He must think A) he's going to make it all back or B) what he's going to ultimately lose is not worth as much as destroying his credit for 7 years.
- uziko, on 01/30/2008, -3/+2Actually, buying a home is only worth it if you put a large down payment on it or don't finance it. If you finance it with no money down, almost all of your money is going to the bank in interest and not to paying off your home. Also if the value of the home is going down it's also not worth it. Buying a home is good in some situations but not all.
- StaticThunder, on 01/29/2008, -5/+3Most people don't get to leech off of someone else's good will. Be sure to thank whoever is letting you live in their house without paying rent. Renting a house is the equivalent of an apartment, for the purpose of discussions like these.
- JimmyIkon, on 01/29/2008, -4/+5It's all because the socialist left thinks "everyone should be a home-owner". It's hard not to give out risky loans when the govt is practically forcing you to.
- kiwiboyus, on 01/29/2008, -1/+2Unless you are joking you can piss off, if anything this is Capitalism at work. A bunch of people saw a way to make a lot of money quick by giving loans to an untapped market, and most likely the original master minds got out of it early to leave the copy cats to take the fall.
- JimmyIkon, on 01/30/2008, -0/+1You are right. I never said my comment was the only reason.
- Drax0n, on 01/30/2008, -2/+2WOw, Yes I can see it now.. the government held gus to the greedy bankers ehads and said You must sucker these peoplen into loans they can't afford...
OH WAIT YOUR RIGHT! most of these loans were signed when republicans controlled the house, the senate, and the whitehouse. so you were correct except replace left with right and socialist with neo conservitice. - slantyeyed, on 01/30/2008, -0/+2not everyone should be a home owner . . . only people with good credit.
- rockefeller2, on 01/30/2008, -1/+1Are you talking about the NAGGERS?
- kiwiboyus, on 01/29/2008, -1/+2Unless you are joking you can piss off, if anything this is Capitalism at work. A bunch of people saw a way to make a lot of money quick by giving loans to an untapped market, and most likely the original master minds got out of it early to leave the copy cats to take the fall.
- akashra, on 01/29/2008, -1/+126%? Sounds like the interest rates they're charging on home loans in the US. Perhaps this could have something to do with why so many people are defaulting?
- sexydarin, on 01/29/2008, -0/+23 more year of slump to go.
- Tenareth, on 01/30/2008, -0/+0Eh... I'd say 2 at tops.
- FelixdaaHack, on 01/29/2008, -1/+1izzz gonna get me minez
- fearziz, on 01/29/2008, -1/+2You couldn't tell there was a slump where I live. The price of homes are priced way over their worth and people wonder why they won't sell. I'm sorry folks but I'm not giving away my money. I'll rent biatches.
- snakattak, on 01/30/2008, -2/+1So you'd rather give your money away every month to someone else? Even if the homes are overpriced, wouldn't you like to earn some equity over the long rung? In a down market you could still make some money in 5+ years or so. Unless you can afford to save a few grand a month in stocks/bonds/money markets, etc..., owning a home is still the next best thing.
- StaticThunder, on 01/30/2008, -0/+5It really only makes sense if you are going to stay in the same area for 5 years, otherwise you get nailed on closing costs. Most of the first couple years is all interest even with a reasonable down-payment.
But figuring out whether it makes sense to buy or rent is a pretty simple calculation, anybody who says you should never buy, and anyone who says you should never rent is oversimplifying.
But if you are renting, you should consider banking the difference between that and a house payment. Thats the part that everyone seems to forget. - Tenareth, on 01/30/2008, -0/+2Home ownership has a lot of other costs most people ignore. Like Static said, it involves how long you expect to stay in the same home, though recently the break even point has moved to closer to 7 years.
- StaticThunder, on 01/30/2008, -0/+5It really only makes sense if you are going to stay in the same area for 5 years, otherwise you get nailed on closing costs. Most of the first couple years is all interest even with a reasonable down-payment.
- snakattak, on 01/30/2008, -2/+1So you'd rather give your money away every month to someone else? Even if the homes are overpriced, wouldn't you like to earn some equity over the long rung? In a down market you could still make some money in 5+ years or so. Unless you can afford to save a few grand a month in stocks/bonds/money markets, etc..., owning a home is still the next best thing.
- slymcfly, on 01/30/2008, -0/+0rates are at a four year low so that should support the market a little bit but the market has a bit to go...some people are saying 10% min. in price but prices have been stablizing because rates have dropped but that can't keep the amount of houses that need to be sold from hitting the market for the summer....i say buy after the summer when people are desperate to sell or the winter when no one is looking....when there is blood in the streets then it's time to buy. Even 2009 would be ok - if you can wait a year. Easy money is coming!
- akatherder, on 01/30/2008, -0/+2This only hurts homeowners who sell their houses now and move to a rental. If I suddenly decided to move to a new house, we would sell our house at a low rate, but the house we buy would also be cheaper. If I wait out the slump, I will get more for my house and pay more for our next house.
- StaticThunder, on 01/30/2008, -0/+2And interest rates right now are GREAT if you have good credit.
- Drax0n, on 01/30/2008, -0/+1Umm.. no this hurts the people who have to forclose their house. and dont have the option of buying a new house.
- StaticThunder, on 01/30/2008, -0/+1Why do they have to foreclose? Barring job-loss and being upside down on the loan, or medical crises, the main reason is they took out an arm or second-mortgage to cash out their equity and were counting on being able to refinance. The market didn't do it to them, they did it to themselves.
Pardon me for not being more sympathetic, but its their fault that prices were inflated in the first place and that I even need to pay attention to the market at all.
- StaticThunder, on 01/30/2008, -0/+1Why do they have to foreclose? Barring job-loss and being upside down on the loan, or medical crises, the main reason is they took out an arm or second-mortgage to cash out their equity and were counting on being able to refinance. The market didn't do it to them, they did it to themselves.
- italicdrones, on 01/30/2008, -0/+2Great! I get so sick of seeing these ugly new houses and strip centers being built overnight where there used to be beautiful pastures.
- pinguwin, on 01/30/2008, -0/+0Actually, a lot of those pastures are just as obscene as the houses. It was the farmers who plowed under the prairie or cleared the land of the forests in many cases.
- katorga, on 01/30/2008, -0/+1It is nice to be able to eat though.
- pinguwin, on 01/30/2008, -0/+0Actually, a lot of those pastures are just as obscene as the houses. It was the farmers who plowed under the prairie or cleared the land of the forests in many cases.
- justabum, on 01/30/2008, -0/+1how depressing watching the world collapse and housing still going up in my neck of the woods
- Tenareth, on 01/30/2008, -0/+1Seattle?
- kevdotbadger, on 01/30/2008, -0/+1National Tramps Union rose by 26% in 2007 aswell.
Coincidence? - razorsedge555, on 01/30/2008, -0/+1Well, I've seen the quality of construction on townhomes going up next door to me. Absolute crap. Illegals doing most of the work. They're in the neighborhood of 350K to over a mil. If this developer loses his shirt, so be it. These developers having been raking the money in for the last several years; now they'll be crying that their profits are dropping. And the banks? Screw all of them, they made their money, now they want the rest of us to bail them out.
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