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  1. #1
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    Home sales Plunge to 1989 Level

    Sales of Previously Owned Homes Plunge to 1989 Level

    By JEREMY W. PETERS
    Published: April 25, 2007


    A rebound in residential real estate remains elusive.

    After two months of stronger sales and some tentative suggestions that the housing market was stabilizing, sales last month of previously owned homes took their biggest tumble in nearly two decades.

    The National Association of Realtors said yesterday that sales of existing homes, which account for the vast majority of all home sales, fell 8.4 percent in March. That was the steepest monthly decline since January 1989.

    The combination of winter weather and newly tightened lending standards for people with weak credit probably sped the drop, economists said.

    The fresh data on home sales came as two other economic reports showed further deterioration in home prices in major metropolitan areas and a growing sense of consumer unease.

    At first, the news deflated stock prices on Wall Street. Investors quickly shook off their worries and pushed the Dow Jones industrial average high enough to come within 11 points of 13,000 — a high point it has never crossed. But at the close of the trading day stocks finished mixed, with the Dow closing up 34.54 points, to 12,953.94.

    The Realtors association’s report reflected a housing market that became increasingly unfriendly to those looking to sell their homes last month. While the number of unsold existing homes for sale fell 1.6 percent in March, to 3,745,000, it took longer to sell a home. There was a 7.3-month supply of unsold properties last month, up from a 6.8-month supply in February.

    The backlog grew even as prices dropped. The median price of an existing single-family home decreased 0.9 percent last month, to $215,300, compared with a year earlier. Total sales compared with a year earlier were off 11.3 percent.

    “Because demand is weak, and because inventories remain high, there’s little ability for prices to rise,” said Celia Chen, director of housing economics at Moody’s economy.com. Ms. Chen speculated that the overall inventory number may have declined last month because sellers were pulling their homes off the market in frustration.

    “The overall trend in housing is still weak,” she said.

    The sharp fall in existing home sales last month was a sign that the increases earlier this year were not in line with the market’s underlying path.

    “The January, February figures were certainly higher than many analysts had anticipated, and that was due to the sort of artificial elevation from the warm weather,” said Lawrence Yun, senior economist with the Realtors association. “Now it’s payback time in March.”

    Mr. Yun said that as the weather becomes warmer and seasonal distortions become less of a factor, it will be easier to determine where the market is headed. “That’s when we have the weather influences out of the way, and we’ll see the market stabilize, recover or continue to slump,” he said.

    Regionally, housing market conditions were most depressed in the Midwest, where sales fell 10.9 percent in March. Sales in the South declined 6.2 percent, while they fell 8.2 percent in the Northeast and 9.1 percent in the West.

    Such widespread sales declines suggested that the problems plaguing subprime mortgage lenders — those who loan to people with weak credit — are playing a role, said Patrick Newport, an economist with Global Insight. “The weather really doesn’t usually affect existing home sales that much.”

    Mr. Yun said that some would-be buyers with borderline credit are having difficulty obtaining loans. At the same time, mortgage lenders have faced a tight squeeze as more and more subprime borrowers have defaulted on their loans.

    One bright spot in the housing data was sales of condominiums. In contrast to overall home prices and sales — which both declined — sales of condos and co-op apartments were unchanged last month as prices rose 3.2 percent, to $228,200, compared with a year earlier.

    But prices on average remained in a slump. The Realtors association report showed the eighth straight monthly price decline. A separate report from Standard and Poor’s, which surveyed home prices in 20 major metropolitan areas, found that prices fell in 17 of those cities in February.

    The only cities where prices rose last month were Dallas, Portland, Ore., and Seattle.

    And the Conference Board said yesterday that its measure of consumer confidence for April fell for the second straight month.



    .

  2. #2
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    Re: Home sales Plunge to 1989 Level

    Facinating how market economies work isn't it? They do have a life of their own.
    The terminally stupid and certifiably insane.

  3. #3
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    Re: Home sales Plunge to 1989 Level

    Quote Originally Posted by bogie
    Facinating how market economies work isn't it? They do have a life of their own.
    It does create a "buyer's market" however, only for buyers with good credit. LOL.

    Not a good time to try to sell a home.

    Lady Mod

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    Re: Home sales Plunge to 1989 Level

    It couldnt stay at the "fever pitch" forever.

  5. #5
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    Re: Home sales Plunge to 1989 Level

    I don't rely on month to month statistics...they'll drive you crazy. While I think we will go into a downhill slump on the housing market because of the big boom and now people defaulting on loans they couldn't afford - month to month is not the way to keep up with it. Maybe quarterly or every six months.

    It is not that hard to get a homeloan, especially if you are a first time buyer. Even with the crackdowns, people with bad credit can get a loan, just with higher interest. What they are cracking down on are these interest only mortgages which never should have been marketed to the average consumer anyway. They were meant for people who invest in the property and later sell it. They could have cheap payments, have the money to fix it up and then sell it before the mortgage payment doubled or tripled. The average joe has been duped into thinking they can afford a $400,000.00 house, and they can for the first five years until they have actually have to get a real mortgage. They kid themselves into thinking they will be making more by then. Most of us don't double or triple our income in five years but I bet the mortgage companies tell them they will. These companies that are marketing these loans are falling and it is their fault as well as the consumer. They know these people can't afford these loans but they still give them anyway.

  6. #6
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    Re: Home sales Plunge to 1989 Level

    We got through previous slumps and we will get through this one.

  7. #7
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    Re: Home sales Plunge to 1989 Level

    Quote Originally Posted by sojustask
    It does create a "buyer's market" however, only for buyers with good credit. LOL.

    Not a good time to try to sell a home.

    Lady Mod
    True. The market needed a correction to disuade some of the idiotic financing going on.
    The terminally stupid and certifiably insane.

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    Re: Home sales Plunge to 1989 Level

    Quote Originally Posted by Odear
    We got through previous slumps and we will get through this one.

    Of course...people have to have a place to live. Either people will eventually buy the homes and live in them or somebody will buy it and rent it out. Although there has been a big problem in my area with developers building all these houses and now they're just sitting empty with nobody buying.

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    Re: Home sales Plunge to 1989 Level

    Quote Originally Posted by Button
    Of course...people have to have a place to live. Either people will eventually buy the homes and live in them or somebody will buy it and rent it out. Although there has been a big problem in my area with developers building all these houses and now they're just sitting empty with nobody buying.
    Alot of supply? Not much demand? Simple, isn't it.
    The terminally stupid and certifiably insane.

  10. #10
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    Re: Home sales Plunge to 1989 Level

    Quote Originally Posted by bogie
    True. The market needed a correction to disuade some of the idiotic financing going on.
    I have to agree with you there. It was ridiculous.

    LM

  11. #11
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    Re: Home sales Plunge to 1989 Level

    Quote Originally Posted by bogie
    Alot of supply? Not much demand? Simple, isn't it.

    Couple that with the over the top financing that's been going on and there you have it. But it will regulate itself out eventually because like I said earlier, everybody's got to have a place to live whether they rent or buy.

  12. #12
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    Re: Home sales Plunge to 1989 Level

    Quote Originally Posted by Button
    Couple that with the over the top financing that's been going on and there you have it. But it will regulate itself out eventually because like I said earlier, everybody's got to have a place to live whether they rent or buy.
    Markets are living beings.
    The terminally stupid and certifiably insane.

  13. #13
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    Re: Home sales Plunge to 1989 Level

    Quote Originally Posted by sojustask
    I have to agree with you there. LM
    Just a passing illness. You'll get over it. :D
    The terminally stupid and certifiably insane.

  14. #14
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    Re: Home sales Plunge to 1989 Level

    What goes up...!

  15. #15
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    Re: Home sales Plunge to 1989 Level

    Must come down. Market was completely nuts.
    All advertising is lies, deceit, and misdirection.

  16. #16
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    Re: Home sales Plunge to 1989 Level

    Short and to the point!

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