Housing Market Is Showing Signs of a Turnaround - Mercedes-Benz Forum

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post #1 of 15 (permalink) Old 06-09-2008, 03:05 PM Thread Starter
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Housing Market Is Showing Signs of a Turnaround

By Reuters | 09 Jun 2008 | 10:05 AM ET

Pending sales of previously owned U.S. homes unexpectedly rose in April to the highest level in six months as foreclosed properties flooded the market and drove prices sharply lower, a real estate trade group report showed.



AP


The National Association of Realtors Pending Home Sales Index, based on contracts signed in April and seen as a key barometer of future housing activity, increased 6.3 percent to 88.2 from an unrevised 83.0 in March.

Housing Market Showing Signs of Turnaround - Real Estate * US * News * Story - MSNBC.com

Don't believe everything you think
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post #2 of 15 (permalink) Old 06-09-2008, 03:44 PM
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Good to see that some folks are finally buying again. The article shows that there is an 18 month supply of previously owned homes. Add that to the crashed NEW home sales figures of last week where there is a 13 month supply of homes for sale and it is no wonder that prices are in the tank.

Good news for buyers and investors, absolutely sucky news for sellers that no longer have any equity or banks that had to sell at losses on their foreclosures.

I think the articles optimism that this will settle in a few months is a bit premature. There has never been this kind of inventory in the history of the market. There has never been this kind of equity loss in the history of the market and there has never been this kind of credit tightening in the history of the market.

That optimism is based on something besides history and evidence.

EDIT: Here is the problem from the Homeowner/seller side of the equation.

Nearly 8.5 million homeowners had negative or no equity in their homes at the end of March, representing more than 16 percent of all homeowners with mortgages, according to Mark Zandi, chief economist at Moody's Economy.com. He estimates that will increase to 12.2 million, or almost one out of every four homeowners, by the end of June.

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Last edited by mcbear; 06-09-2008 at 03:50 PM.
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post #3 of 15 (permalink) Old 06-09-2008, 03:51 PM Thread Starter
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Good to see that some folks are finally buying again. The article shows that there is an 18 month supply of previously owned homes. Add that to the crashed NEW home sales figures of last week where there is a 13 month supply of homes for sale and it is no wonder that prices are in the tank.

Good news for buyers and investors, absolutely sucky news for sellers that no longer have any equity or banks that had to sell at losses on their foreclosures.

I think the articles optimism that this will settle in a few months is a bit premature. There has never been this kind of inventory in the history of the market. There has never been this kind of equity loss in the history of the market and there has never been this kind of credit tightening in the history of the market.

That optimism is based on something besides history and evidence.
You apparently forgot this Samuelson article...

Reviving the Real Estate Market
Why lower home prices are the only true solution to the housing collapse.

Samuelson: Let Home Prices Fall | Newsweek Voices - Robert J. Samuelson | Newsweek.com

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post #4 of 15 (permalink) Old 06-09-2008, 07:31 PM
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Any increase in sales is a a good sign but only if it is not associated with a increase
in foreclosures.
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post #5 of 15 (permalink) Old 06-09-2008, 08:24 PM
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You apparently forgot this Samuelson article...

Reviving the Real Estate Market
Why lower home prices are the only true solution to the housing collapse.

Samuelson: Let Home Prices Fall | Newsweek Voices - Robert J. Samuelson | Newsweek.com
I agree that lower prices do have their place, and will, at some point help raise the collapse.

The problem is that the folks that normally buy UP in the market, those folks who sell their current home, use the equity to move up to the next level house have been caught as their homes no longer have equity, and in fact many have negative equity.

With 25% of all homeowners unable to buy UP, that puts a constraint on the buyers market to those who either 1) don't now have a house or 2) don't need an equity investment to buy in. With rising credit requirements and downpayments, the second requirement is harder to come by.

Add in the rising unemployment numbers and you will have an increasing pool of very affordable houses and a decreasing pool of qualified buyers for those houses. When you add in the incentives being offered by new home sales, existing homes are now looking at longer and longer inventory shelf life. And that contributes to the cycle.

So, YES, lower prices are what will bring the collapse out of the ground BUT, the damage done to the buying pool, with foreclosures and collapsing equity pollutes that pool and slows the recovery drastically.

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post #6 of 15 (permalink) Old 06-09-2008, 10:53 PM
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Originally Posted by mcbear View Post
Good to see that some folks are finally buying again. The article shows that there is an 18 month supply of previously owned homes. Add that to the crashed NEW home sales figures of last week where there is a 13 month supply of homes for sale and it is no wonder that prices are in the tank.

Good news for buyers and investors, absolutely sucky news for sellers that no longer have any equity or banks that had to sell at losses on their foreclosures.

I think the articles optimism that this will settle in a few months is a bit premature. There has never been this kind of inventory in the history of the market. There has never been this kind of equity loss in the history of the market and there has never been this kind of credit tightening in the history of the market.

That optimism is based on something besides history and evidence.

EDIT: Here is the problem from the Homeowner/seller side of the equation.

Nearly 8.5 million homeowners had negative or no equity in their homes at the end of March, representing more than 16 percent of all homeowners with mortgages, according to Mark Zandi, chief economist at Moody's Economy.com. He estimates that will increase to 12.2 million, or almost one out of every four homeowners, by the end of June.

Of this estimated 12.2 million, how many do you think will walk away from their home...............
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post #7 of 15 (permalink) Old 06-09-2008, 11:33 PM
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Who's right ? Our resident "experts" , our very own resident loon.. you know
who you are or the chairman ?

Bernanke says economy healing; inflation risks up

3 hours ago

WASHINGTON (AFP) — Federal Reserve chairman Ben Bernanke has said the likelihood of a severe US economic slump has diminished, while "upside risks" to inflation are forcing the Fed to be more vigilant.

The comments appeared to reinforce indications from Bernanke and other Fed members that the central bank is unlikely to cut interest rates further even in the face of weak economic conditions.

Bernanke, speaking at a forum sponsored by the Boston Fed, suggested the economy appears to be on the mend even if conditions are fragile, as evidenced by the jump in unemployment to 5.5 percent reported last week.

"Despite the unwelcome rise in the unemployment rate that was reported last week, the risk that the economy has entered a substantial downturn appears to have diminished over the past month or so," said Bernanke.

"Over the remainder of 2008, the effects of monetary and fiscal stimulus, a gradual ebbing of the drag from residential construction, further progress in the repair of financial and credit markets, and still-solid demand from abroad should provide some offset to the headwinds that still face the economy."

Bernanke was referring to the government's 168-billion-dollar stimulus package centered on tax rebates to boost consumer spending, and the Fed's aggressive actions to cut the federal funds rate to 2.0 percent from 5.25 percent last September.
AFP: Bernanke says economy healing; inflation risks up
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post #8 of 15 (permalink) Old 06-09-2008, 11:42 PM
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Bernanke has a product to sell just like everyone else.
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post #9 of 15 (permalink) Old 06-09-2008, 11:44 PM
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Only his reputation and legacy is stake. He has nothing to sell.

I can't believe I am having a one on one with mr detroit iron.
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post #10 of 15 (permalink) Old 06-10-2008, 04:08 AM
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Originally Posted by mlfun View Post
Who's right ? Our resident "experts" , our very own resident loon.. you know
who you are or the chairman ?

Bernanke says economy healing; inflation risks up

3 hours ago

WASHINGTON (AFP) — Federal Reserve chairman Ben Bernanke has said the likelihood of a severe US economic slump has diminished, while "upside risks" to inflation are forcing the Fed to be more vigilant.

The comments appeared to reinforce indications from Bernanke and other Fed members that the central bank is unlikely to cut interest rates further even in the face of weak economic conditions.

Bernanke, speaking at a forum sponsored by the Boston Fed, suggested the economy appears to be on the mend even if conditions are fragile, as evidenced by the jump in unemployment to 5.5 percent reported last week.

"Despite the unwelcome rise in the unemployment rate that was reported last week, the risk that the economy has entered a substantial downturn appears to have diminished over the past month or so," said Bernanke.

"Over the remainder of 2008, the effects of monetary and fiscal stimulus, a gradual ebbing of the drag from residential construction, further progress in the repair of financial and credit markets, and still-solid demand from abroad should provide some offset to the headwinds that still face the economy."

Bernanke was referring to the government's 168-billion-dollar stimulus package centered on tax rebates to boost consumer spending, and the Fed's aggressive actions to cut the federal funds rate to 2.0 percent from 5.25 percent last September.
AFP: Bernanke says economy healing; inflation risks up


If you look at the last 12 to 18 months the Hank and Ben show have been 12 to 18 months behind the curve in making decisions for the US economy......
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