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ghemminger
07-29-2007, 12:04 PM
you just bought a depreciating asset. Underwater bagholder.


Here is some good data on New Home sales. It looks like we are back in the 90's. Break out the flannel.

"At the current pace, new home sales for 2007 will probably be in the high 800 thousands - about the same level as in 1998 through 2000. This is significantly below the forecasts of even many bearish forecasters.

If sales slow in the 2nd half of 2007 - as I expect - New Home sales might be in the low 800s - the lowest level since 1997."

http://calculatedrisk.blogspot.com/2007/07/more-on-june-new-home-sales.html

MozoVote
07-29-2007, 12:07 PM
I live in Charlotte, which has been described as one of the few "bright spots" in a deteriorating market. Now locals are starting to gripe about slow sales. There are still lookers interested in purchasing, but they can't sell their homes in the states they are moving from.

There are fewer and fewer places to hide. The housing glut will be national by the end of the year.

angelatc
07-29-2007, 12:10 PM
Chicagoland has bucked the trend too.

Unless you're moving in 5 years or something, the housing market shouldn't really bother you that much. It will come back, it always does.

james1906
07-29-2007, 12:11 PM
i bought in houston a couple months ago. the housing bubble never made it to texas, so i'm not too concerned.

ladyjade3
07-29-2007, 12:13 PM
People always need a place to live. Your house is never worthless. Just maybe worth less.

DC I hear is always a good market. The largest employer there never has layoffs. ;)

angelatc
07-29-2007, 12:17 PM
People always need a place to live. Your house is never worthless. Just maybe worth less.



10-15 years ago the Long Island housing market was really depressed, and my cousins had to move. They were upside down, in that they would have needed $30,000 at the closing table to make up the difference between the mortgage amount and the current value.

They kept it and rented it out, and after about 10 years they sold it for a decent profit. It sucked for a while, but it all worked out ok.

MsDoodahs
07-29-2007, 12:24 PM
you just bought a depreciating asset. Underwater bagholder.




That may or may not be the case.

You do not know the specifics for any of the individuals reading here and to make such a statement is nothing more than fearmongering.

freelance
07-29-2007, 12:26 PM
Nashville is bucking the trend, but we didn't appreciate off the scale like other areas. Condos are slow, but houses aren't. High-end houses are still appreciating.

james1906
07-29-2007, 12:30 PM
the south (except florida) and much of the midwest shouldn't get hit too hard.

Suzu
07-29-2007, 12:40 PM
SW Missouri is still OK. I bought in late '05 and our taxes just went up based only on appreciation.

ghemminger
07-29-2007, 12:53 PM
Here is the cross post of what was put up on Zacks.com. Some of it is a repeat of CR's 1st post on the subject, but has some color and a few additional details.

"Today’s report on New home sales is even uglier than yesterday’s report on existing home sales. Apparent ly, outside of Dixie, housing sales have crumpled to nearly a complete stop. Ok, that’s exaggerating, but not by much. June new home sales were down 6.6% from June (on a seasonally adjusted annual basis or SAAR) to 834k, from 893k in May. The May number had originally been posted at 915K, so the drop from the original estimate was 8.9%. On a year over year basis new home sales were down 22.3% from a rate of 1.073 million in June 2006. This was far below consensus expectations of an annual rate of 900k for June. Digging under the national news, things look significantly worse. The big South region actually posted a 7.6% gain in home sales. The other regions posted their biggest one month drops in who knows how long (I’ll have to go dig that up later). Sales in the Northeast tumbled 27.1% for the month, but were flat with a year ago. In the Midwest, sales fell 17.1% for the month and are down 28.4% year over year. Out West, the sun is setting as sales shrunk 22.5% for the month and are off a staggering 42.8% on a year over year basis. In June, the importance of the southern region to total sales increased to 59.1% of total national sales, from 51.3% in May and 52.7% a year ago. On an actual number of houses sold in the month basis (not seasonally adjusted), nationwide sales fell to 77k from 82k in May and 98k a year ago



By price range, it looks like the big hit was taken in the mid-range new houses. Sales of starter houses (less than $200K) actually ticked up slightly to 30k houses (actual not SAAR) from 29k in May, but down from 35k in June of 2006. Similarly, McMansions (over $500k) were flat at 10k for the month in both May and June of this year and down from 11k a year ago. However, mid-priced homes (between $200k and 499K) fell to 37k from 43k (down 14%) in May and from 51k (down 27.5%) a year ago.



There is no way to sugar coat it, this was an ugly report, far worse than I expected, and very few people have confused be with having an overly cheery view of the housing market for a long, time. The reports from the homebuilders as they report their earnings (or lack there of) confirm that this situation is not about to turn around any time soon."

born2drv
07-29-2007, 03:07 PM
The US dollar will either inflate like mad, catching up with the inflation of housing, or all real assets including housing will plummet with some of the highest interest rates we've ever seen.

So which will it be? I personally think we are going to live in a massive cycle of inflation in the next 10 years. Minimum wage is going up some 20% now, and I bet if the democrats get in power it will go up another 20% in a year or two.... everything from food to energy to materials is skyrocketing.

So I don't think you have anything to worry regarding the value of your house, it will be worth many millions soon. Trouble is millions of US dollar paper will be worthless in the international marketplace.

Unless the Fed decides to hell with everyone and their homes and ratchets up interest rates astronomically to kill inflation, but they'll kill us all in the process. 2 very ugly scenarios.

I personally think they'll just let inflation take its course so if you recently bought a house I wouldn't be that worried.

McDermit
07-29-2007, 04:08 PM
The bubble didn't affect this area much. I got a bargain on my home anyway, and I paid cash with no mortgage to worry about. I'm in the clear. :)

RP08
07-29-2007, 04:11 PM
People always need a place to live. Your house is never worthless. Just maybe worth less.

this sums it up.

JPFromTally
07-29-2007, 08:20 PM
This is silly thinking because there are only 3 options when it comes to housing: own it, rent it or be homeless.

So even if I was a renter I would still have to pay the landlord's mortgage, regardless of whether the asset was depreciating. I'd rather own and take advantage of the tax rules.

Lois
07-30-2007, 05:44 AM
I bought a home in a University town two years ago(supposedly at the top of the housing market) and it was just appraised for $35,000 more than I paid for it. There are safe places. It's also my dream home, totally unique. It's worth a million dollars to me.

JohnCrabtree
07-30-2007, 12:38 PM
The housing bubble in my area burst about 50 years ago. I live in Benton Harbor, MI. I bought a 5 BR 2100 sq ft house for $48,000 last year. BH Realestate is appreciating quite fast due to an increase in jobs and high dollar projects in the area. My house just appraised at $76,000. My mortgage is $200 less than what I paid for rent before. Only $300 a month.

jaybone
07-30-2007, 04:19 PM
As long as your mortgage is FIXED and at a decent rate, and you can make the payments (ie. steady job), you'll be fine in 5-8 years.
Prices will probably decline in the short term (2-3 years for real estate), then I see pretty massive hyperinflation setting in with the US$.
See, if you have a fixed rate loan, your payments are going to be the same for the next few decades. Same in dollar terms that is.
So when the FED fires up the printing press, your dollars are worth less but your DEBTS are worth less too.
Leverage that hyper inflation with some gold/silver bullion and make it work for you!

BTW, I bought in North Jersey, waaay expensive but a 20-min train ride to Penn station. We are also blessed with a strong influx of immigrants and good jobs, both of which stabalize the market greatly. The guy across the street just sold his house 20 days after listing for over the asking price.