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Thread: New Home Sales up 15% YoY and 4.4% from October to November

  1. #1

    Default New Home Sales up 15% YoY and 4.4% from October to November

    The Census Bureau reported Thursday that sales of new homes rose to an annual rate of 377,000 in the month, up 4.4% from October, and up 15% from year-earlier levels. It was the highest rate of new-home sales since April 2010, when sales were inflated by a temporary $8,000 tax credit for home buyers.

    There was only a 4.7 month supply of new homes on the market in November, the same tight inventory as has been the case in four of the previous six months. The last time there was a tighter supply of new homes available was in October 2005, near the height of the housing bubble.

    The tight supply has lifted the median price of a new home sold in November to $246,200, up 14.9% from the comparable price a year earlier.
    http://money.cnn.com/2012/12/27/real...ew-home-sales/



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    Member Zippyjuan's Avatar
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    If anybody is thinking about maybe buying in the next five years or so, you may want to move now- times may not be better than they are today. Record low interest rates and low (but now rising) prices this may present the best opportunity you may see. Rates are not likely to go lower and prices are likely to move higher. Or you could give away the money you currently spend on rent for nothing but a roof over your head.
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  4. #3

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    One of many of the new bubbles... buying a house? Here's $15K

    Philadelphia is one of 20 cities that will benefit from a total of $170 million Wells Fargo has committed through its LIFTSM programs (including NeighborhoodLIFTSM and CityLIFTSM ) to support sustainable housing in cities affected by the economic downturn.

    potential homebuyers can find out if they qualify for the down payment assistance program and reserve funds – up to $15,000 – for 60 days for home purchases

    CityLIFTSM is based on Wells Fargo’s NeighborhoodLIFTSM program, which is currently active in Atlanta, Houston, Jacksonville, Las Vegas, Los Angeles, Miami, Minneapolis/St. Paul, Orlando, Phoenix, and Tampa. The NeighborhoodLIFTSM program is a collaboration between Wells Fargo Bank, N.A., the Wells Fargo Foundation, NeighborWorks America, an independent non-profit organization, and local non-profit organizations. Wells Fargo’s LIFTSM programs have helped create 263 new homeowners to date, with another 244 potential new homeowners in process of closing on a home.
    https://www.wellsfargo.com/mortgage/lift/city

    The CityLIFTSM program is a collaborative program of Wells Fargo Bank, N.A. and NeighborWorks America, an independent nonprofit organization. The NeighborhoodLIFTSM program is a collaborative program of Wells Fargo Bank, N.A., Wells Fargo Foundation, and NeighborWorks America, an independent nonprofit organization.

    This down payment assistance program is available for households earning 120% or less of the area’s median income, adjusted for household size, although specific loan products have lower income limits. Although Wells Fargo is the sponsor of the CityLIFT and NeighborhoodLIFT programs, you may seek financing for the remaining balance of the home purchase from any qualified lender who accepts the CityLIFT or NeighborhoodLIFT down payment assistance program.
    Wells Fargo team members are not eligible to participate in the CityLIFT and NeighborhoodLIFT programs. This limitation also applies to a team member’s immediate family, including spouses and dependent children, where the team member would have beneficial ownership of the property that was the subject of the DAP.
    CityLIFT and NeighborhoodLIFT funds cannot be used to purchase bank-owned properties being managed by Wells Fargo Premier Asset Services.



    Last edited by HOLLYWOOD; 12-27-2012 at 02:03 PM.
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    Member Zippyjuan's Avatar
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    Looks like that Wells Fargo program only loans you the money for 60 days- then you have to pay it back? Probably not going to be a hugely popular program.

    potential homebuyers can find out if they qualify for the down payment assistance program and reserve funds – up to $15,000 – for 60 days for home purchases
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  6. #5

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    LOL loans for loans. Unreal.

    Quote Originally Posted by HOLLYWOOD View Post
    One of many of the new bubbles... buying a house? Here's $15K



    https://www.wellsfargo.com/mortgage/lift/city
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  7. #6

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    Quote Originally Posted by Seraphim View Post
    LOL loans for loans. Unreal.
    Gotta keep pumping furiously to keep this mess afloat. Ill pay attention to new house sales numbers when I start seeing the ransacked and boarded up foreclosures in my neighborhood start being rehabbed and sold. Still way too many of them sitting around. New houses are crappy constructions with chinese drywall and cheap wood at low prices but high markups.
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  8. #7

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    Quote Originally Posted by devil21 View Post
    Gotta keep pumping furiously to keep this mess afloat. Ill pay attention to new house sales numbers when I start seeing the ransacked and boarded up foreclosures in my neighborhood start being rehabbed and sold. Still way too many of them sitting around. New houses are crappy constructions with chinese drywall and cheap wood at low prices but high markups.
    BIG reason why the house I choose (Canada) was made in 1951. It's built so well.
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  9. #8

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    Quote Originally Posted by Zippyjuan View Post
    Looks like that Wells Fargo program only loans you the money for 60 days- then you have to pay it back? Probably not going to be a hugely popular program.
    HINT:

    http://abclocal.go.com/wls/story?sec...ois&id=8834536
    http://illinoisattorneygeneral.gov/p...goCityLIFT.pdf
    ]Wells Fargo settlement includes $15,000 grants for homeowners
    Wednesday, October 03, 2012

    Illinois Attorney General Lisa Madigan speaks at a conference in Springfield. (AP)

    October 3, 2012 (CHICAGO) (WLS) -- More than $8 million will be soon be available to help Chicago area residents buy homes as part of a settlement with Wells Fargo Bank.
    Attorney General Lisa Madigan announced Wednesday that those who qualify could receive $15,000 grants to be used toward the down payment on a home.
    The program, called 'City Lift,' is the result of a fair lending settlement between Wells Fargo, The U.S. Department of Justice and the Illinois Attorney General's Office.
    "This is a unique opportunity, it is a rare opportunity. We applaud Wells for bringing this to the Chicago area. And we would be delighted if other financial institutions would recognize the importance of programs of this nature," Illinois AG Lisa Madigan said.
    Prospective homeowners will have their first chance to apply for these grants later this month. Find out about workshops and who qualifies at http://illinoisattorneygeneral.gov/p...goCityLIFT.pdf
    Last edited by HOLLYWOOD; 12-27-2012 at 06:13 PM.
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    Site Staff - Moderator Brian4Liberty's Avatar
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    Bubble time again. There is an interesting TV show about property bidding wars in Arizona. No inspections, no knowledge of the interior, as is. Many episodes end with a statement that they make money no matter how bad a deal they got, due to housing prices rising so fast.

    http://dsc.discovery.com/tv-shows/property-wars
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  11. #10

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    Quote Originally Posted by Zippyjuan View Post
    If anybody is thinking about maybe buying in the next five years or so, you may want to move now- times may not be better than they are today. Record low interest rates and low (but now rising) prices this may present the best opportunity you may see. Rates are not likely to go lower and prices are likely to move higher. Or you could give away the money you currently spend on rent for nothing but a roof over your head.
    but isn't it possible that housing prices will drop to where interest rates won't matter? I mean, you can get a $200K loan for 3% today. But if you can get the same house later for $100K, would it matter if interest rate was 10% ? I am curious why you believe housing prices will go up? Is it decreased supply or increase demand? What about the unemployed today? Are they going to start having steady pay jobs (more importantly, will they believe they'll have them for 20 years)?
    Last edited by Tpoints; 12-30-2012 at 02:37 PM.

  12. #11

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    Quote Originally Posted by Tpoints View Post
    but isn't it possible that housing prices will drop to where interest rates won't matter? I mean, you can get a $200K loan for 3% today. But if you can get the same house later for $100K, would it matter if interest rate was 10% ? I am curious why you believe housing prices will go up? Is it decreased supply or increase demand? What about the unemployed today? Are they going to start having steady pay jobs (more importantly, will they believe they'll have them for 20 years)?

    Another interesting point that a lot of people don't consider is that housing prices can go well beyond the point of "replacement cost" due to supply and demand. To blindly say that replacement cost gives you a floor on housing investments is just plain crazy.

  13. #12

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    Quote Originally Posted by jclay2 View Post
    Another interesting point that a lot of people don't consider is that housing prices can go well beyond the point of "replacement cost" due to supply and demand. To blindly say that replacement cost gives you a floor on housing investments is just plain crazy.
    I don't know what that means, explain please?

  14. #13

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    Quote Originally Posted by Tpoints View Post
    I don't know what that means, explain please?
    I was just referring to the fact that used home prices in some areas of the US can become less expensive than the cost to build new homes. This might seem contradictory or impossible, however, many times shear supply and demand fundamentals will overwhelm logical barriers like replacement cost and send home prices to levels that many might think are impossible. I was not trying to contradict your point, just adding to the discussion of home prices getting cut in half which you mentioned in your post.

  15. #14

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    And during the bottom, everyone on this forum was screaming not to buy real estate because it would soon be worthless. Presumably because people would dump their homes on the market for pennies because they'd rather live in their cars.

  16. #15
    Member newbitech's Avatar
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    Quote Originally Posted by devil21 View Post
    Gotta keep pumping furiously to keep this mess afloat. Ill pay attention to new house sales numbers when I start seeing the ransacked and boarded up foreclosures in my neighborhood start being rehabbed and sold. Still way too many of them sitting around. New houses are crappy constructions with chinese drywall and cheap wood at low prices but high markups.
    this is the signal to watch for... Think about it. If you had 100 houses in various states of disrepair, would you try to sell the worst ones first? Or would you try to sell the best ones first?

    Of course prices are rising, its the best of the foreclosures that are finally hitting the markets. The one's that don't need 40k-50k in repairs.

    Here is a real life example. We have a 6 bed 2 1/2 bath house. 2 car garage, total 3,400 square feet. The mortgage holder has just completed bankruptcy and has notified roommates that its time to look for a new place to rent.

    The property is located in a market where a similar home was built in 2007 with a sales price of $240k.

    So what do you think those numbers look like for the house we are looking at?

    The house is block home, built in the 1950's.

    We are looking to pick this up on a short sale for 50-60% of the loan value, according to the broker that deals with Wells Fargo. The note is 85k. There are no encumbrances on the deed.

    According to zillow, median price for 1 mile in the surrounding neighborhood is 77k, which is down nearly 20% from last year, and down nearly 40% from 2 years ago. This is also verified through county property appraiser records.

    The point is, here is yet another foreclosure that has yet to officially hit the banks balance sheet. The property from the outside isn't really dragging the market, it sort of fits in. It's a corner house, and clearly at one point it was the nicest house on the block. It needs 40k-50k repairs.

    So is it worth 240k? is it worth 85k? is it worth 77k? is it worth 40k?

    Market isn't going up, not until the majority of these types of properties are dealt with. And it's pretty clear to me that the majority of these types of houses aren't even in foreclosure yet.

    In any other housing cycle, there is the remodeling component that leads the expansion component. We aren't completely through the destruction component yet. The collapse only occurred less than 5 years ago. To believe THIS market is gonna bounce back to equilibrium before it even finishes its downward cycle is the kind of thinking that created the last bubble. I don't buy it unless I know its taking a haircut, AND gonna get a face-lift. Otherwise, that's a "fools" investment at best, and at worse, its something I get stuck with and cripples my ability to be ready to pounce when truly the time is ripe.

    Pre-mature rebound, cyclical in nature, and totally fueled by baseless optimism and suspect numbers. Value has fled the market and valuations are all over the board.

  17. #16

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    The fed announced that their plan for recovery is to reinflate the housing bubble.
    wonder where all the new money is going?
    Whoever falls for this shit a second time around is an idiot.

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  18. #17

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    Quote Originally Posted by torchbearer View Post
    The fed announced that their plan for recovery is to reinflate the housing bubble.
    wonder where all the new money is going?
    Whoever falls for this shit a second time around is an idiot.
    Nice.

  19. #18

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    Quote Originally Posted by misterx View Post
    And during the bottom, everyone on this forum was screaming not to buy real estate because it would soon be worthless. Presumably because people would dump their homes on the market for pennies because they'd rather live in their cars.
    what bottom?

  20. #19

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    Quote Originally Posted by jclay2 View Post
    I was just referring to the fact that used home prices in some areas of the US can become less expensive than the cost to build new homes. This might seem contradictory or impossible, however, many times shear supply and demand fundamentals will overwhelm logical barriers like replacement cost and send home prices to levels that many might think are impossible. I was not trying to contradict your point, just adding to the discussion of home prices getting cut in half which you mentioned in your post.
    Cool. Thanks. Yeah, sometimes other factors such as neighborhood safety make an otherwise perfect home undesireable or unacceptable.

  21. #20

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    Quote Originally Posted by jclay2 View Post
    I was just referring to the fact that used home prices in some areas of the US can become less expensive than the cost to build new homes. This might seem contradictory or impossible, however, many times shear supply and demand fundamentals will overwhelm logical barriers like replacement cost and send home prices to levels that many might think are impossible. I was not trying to contradict your point, just adding to the discussion of home prices getting cut in half which you mentioned in your post.
    Ought it ALWAYS to be the case that a used home is - unless it has hand-crafted or some other too-expensive or impossible to replicate features (like location!) - less expensive than an equal-sized new home? The new home can be built to the best-known standards. There is a lot of stuff you just can't add easily later on like XPS foam insulation underneath concrete slabs. The used home has a used, less efficient furnace and waterheater. Old windows, old roofs, old plumbing. FORMICA! [Yeah, it's in my old house too.]

    I don't doubt there are exceptions for fine craftmanship, but given an old house next to a vacant lot, I would prefer the vacant lot unless buying the old house saved some big bucks.

    Homes depreciate historically - AFAIK. They are knocked down for being obsoltete, out of code, abandoned. What we see are the houses that have been rennovated to maintain a 'like new' quality and the effects of currency inflation. It is like townhouses and condos. Somebody is always putting up new ones that have now-standard features that might have been luxury or not an option 10 years ago. When a new luxury condo building goes up, units in the old luxury condo building next to it go down in value.

    My old home is insured for twice its purchase price because the insurer wrote the policy for reconstruction cost not the cost to buy another old home.

    So I 100% agree replacement value is not a floor. I'd view it as more of a ceiling.

  22. #21

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    Replacement value matters because it means no one will be producing new supply until existing homes rise in price over and beyond the replacement value. No one builds $100,000 homes when the same home is available for sale for $50,000. Hence, replacement value is important for holding down supply until prices can catch up.

  23. #22

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    Quote Originally Posted by Jordan View Post
    Replacement value matters because it means no one will be producing new supply until existing homes rise in price over and beyond the replacement value. No one builds $100,000 homes when the same home is available for sale for $50,000. Hence, replacement value is important for holding down supply until prices can catch up.
    wrong.

  24. #23

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    Quote Originally Posted by cbc58 View Post
    wrong.
    Entirely. Why buy a $100k home when you can build the same one for $200k?!?

  25. #24

  26. #25

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    Quote Originally Posted by cbc58 View Post
    stop. please.
    Use more words. "Wrong." and "stop. please." don't really help move the discussion.

    How dumb do you think people are to believe it's common practice to build a new home for $200k when the same home can be had without waiting for $100k?
    Last edited by Jordan; 01-06-2013 at 06:43 PM.

  27. #26
    Member Zippyjuan's Avatar
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    As long as somebody thinks that they can sell a new home for $200k, they will build a $200k home- even next to $100k homes. Otherwise all new homes would only be worse (cheaper) than the ones already there. There would never be any "upgrades" built.
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