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Index Shows a Rise in Pending Home Sales – NYTimes.com I’m sticking with my assertion that this bear market bottomed out in November.
Enticed by tumbling housing prices, more Americans signed contracts to buy homes in December despite widespread concerns about the economy, an industry group reported on Tuesday.
The National Association of Realtors said that pending home sales rose 6.3 percent in December from a month earlier, with the South and Midwest showing strong gains. The number of pending home sales — those in which a buyer has signed a contract but not closed — were up 2.1 percent from December 2007.
“I’m sticking with my assertion that this bear market bottomed out in November. ”
Are you firm on November? Or are you going to shift one or two months,days,weeks,years?
“An estimated 37,836 new and resale houses and condos were sold in California last month (Dec ’08). That was up 17.6 percent from 32,163 in November and up 47.9 percent from 25,585 for December 2007. Sales have increased on a year-over-year basis for the last six months. California sales for the month of December have varied from last year’s low to a peak of 66,503 in 2003, while the average is 44,844. MDA DataQuick’s statistics go back to 1988.
The median price paid for a home last month was $249,000, down 3.5 percent from $258,000 for the month before, and down 38.1 percent from $402,000 for December a year ago.”
I think that is safe. There are large swaths of the country where the effective price of any house on the market is zero… You can’t sell a house at any price. I think that has impacted people putting their house up for sale.
The problem is real estate will not return to bubble prices any time soon. That will weigh on investor psyche for a long time.
The practice of buying a distressed property and selling it a few months later with some tlc at market prices will not come back for a bunch of years though.
The next step is getting the jobs to the people so that people don’t start moving around Grapes of Wrath style. Heck, even just start sending them to school.
The good news is, we are having a banner year. It seems the Bush years plus the last year has wiped out all the other packagers in the markets that I serve.
Now if people will just start buying stuff again…
JCD wrote “I’m sticking with my assertion that this bear market bottomed out in November.”
Confidence inspired by claims like that is about the only reason people have these days to buy houses. Keep it up, sir. Meanwhile, foreclosures due to rising unemployment, falling wages, and Option-ARM resets virtually guarantee that the glut of homes for sale doesn’t go away anytime soon.
A crisis makes for riskier, yet much more lucrative investment. Let’s hope it’s a trend. Obviously banks are waiting on the rise of interest rates so they can make more money off the loans they make. But the recovery can’t be carried out only by those that happen to have some savings. Banks got us into this mess and only they can get us out.
There is a big difference between a contract and a closing. Many of these buyers will not be able to obtain financing and these contracts are usually contingent on getting financing.
I know a Realtor who has been telling me it’s getting better for 12 months now. Hype is hype and I don’t think we found the bottom yet.
I strongly suspect most homes sales right now are to speculators. Until people start working again, don’t look for any relief.
Bottomed Out eh ?
I actually know nothing but have a hazy recollection of “another batch” of real estate loans getting to reset some time soon==setting off another wave of foreclosures.
Add to that something I did not here a while back==the loss of jobs in the millions and X% of those going into foreclosure=====altogether not a pretty picture.
This is a resetting of the American Economy more consistent with what we actually “PRODUCE” — which is close to nothing.
I will be very surprised if this is but a bump on a 3 year skid to reality.
# 8 bobbo said, “This is a resetting of the American Economy more consistent with what we actually “PRODUCE” — which is close to nothing.”
FTW.
Now, if they’d just synch up the money supply we’d be better off.
They only had to drop the prices 1/3 of the INFLATED price.
NOW those RICH persons can buy up the SLIGHTLY over priced Neighborhoods..YES the WHOLE neighborhood..
#8, Bobbo and everyone else,
… setting off another wave of foreclosures. …
One story making the news the past couple of days has to do with all the toxic paper screwing up the banks ability to foreclose. It seems that they have flipped the paper so many times that no one knows who owns the paper or where the actual paper is.
If anyone gets a notice of foreclosure or letter from a collection agency, the best thing to do is ask for “verification” of the loan. Do it as soon as you get a letter. Verification includes the actual note as well as a list of all payments and who owns and owned the paper.
Because this is now out there, I think most lenders will be a lot more careful trying to foreclose. Especially when they can’t prove they actually own the paper.
Once I was sanguine like you. Until I watched this http://chrismartenson.com/crashcourse/chapter-15-bubbles
There are some flippers working out there. A house on my mom’s block was foreclosed in Nov. A flipper bought it in Dec for $140k, repainted it, and now has it on the market for $195k.
But we don’t know if there will be any buyers, even at the price, which is down from the $210k that was paid in 2007 when the foreclosed buyers purchased it.
#11 Mr. Fusion, those same long trails of changes in mortgage paper ownership frustrate not only the foreclosure process, as you pointed out, but also the foreclosure prevention process. If the Administration, the Fed, and the Congress are able to prevent us from going into a depression over this, it will be the sort of miracle that would amaze even Chesley B. Sullenberger III.
#12–Ultra==good info there, thanks. I’m still waiting for parts of it to load (Slower than DU!!!) but this line has been a concern of mine for a long time:
“Here’s a chart I put together that compares median incomes to median house prices.”
It used to be that the income from one Head of Household could afford t he median house price. Today, a working couple can barely afford a home.
How far would the market have to fall before a single income could once again buy a nice house in a nice neighborhood? Not an Applebee’s Rip Off McMansion==just a roof over your head and good schools?
My last 3 homes were twice the size I wanted so I wouldn’t get cars on jacks in the front yards.
# 15 bobbo said, “Today, a working couple can barely afford a home.”
In my area using the median price & ~$80k down, the income requirement with very low debt, would be at least ~$120,000/year.
Paddy–JCD–wouldn’t “the bottom” of the market be when the medium income of a full time worker qualified to buy the medium cost home?
If not, why not?
And wouldn’t that mean a reality based housing cost market would be much lower than now equating to a lot more hurt?
#12 — his definition says that when a bubble pops it is permanently over. This is ridiculous. I’ve studied housing prices with data from the early 1800’s through the 1950’s… it just keeps going up with the population. Never ends it just fluctuates. This is a fluctuation.
This whole situation is a bogus collapse acting like a blown engine. I stay firm with my November call of the bottom.
If there was another bottom to be had it would have been reflected in a panic over the Iranian missile launch. That seems to have had zero effect on anything. This is a another sign that we are re-building a base for an upward move.
#18–JCD==”If there was another bottom to be had it would have been reflected in a panic over the Iranian missile launch.” /// Holy Crap!!! NOBODY can be that stupid. Now that type of haruspication is often found in the idiocy of stock market analysis, but now to the housing market????
hahahahahahahahahahahah!!!
I hear people study astrology charts for years with the same precision.
# 17 bobbo said, “Paddy–JCD–wouldn’t “the bottom” of the market be when the medium income of a full time worker qualified to buy the medium cost home?
If not, why not?”
It hasn’t been that way here since the early 70’s. Supply & demand. Supply must be being kept under the demand. That is for SFR type housing.
#18 – You’re quibbling about the semantics of “permanently over”? It’s obvious he means the illusion that the asset class is a fast and easy ticket to riches, not that no one will ever want to buy it again, or prices stagnate forever.
What I found compelling was his claim that in every previous bubble, the time it took to deflate was essentially the same as it took to inflate. He claims the housing bubble began in 1998 and peaked around 2006 and thus won’t bottom until … 2012, or 2015! If you believe the stock market won’t be able to make a real recovery until the housing market turns, this is sobering. Even if you believe the bubble didn’t start until 2002, we’re still far from the bottom.
Lower prices yield more sales. Imagine that.
Now see if you guys can figure out the effect of raising the minimum wage…
# 22 MikeN said, “Now see if you guys can figure out the effect of raising the minimum wage…”
Less hiring and more off shoring. I guess that would drive housing even lower.
#22 & 23, Lyin’ Mike & Cow-Paddy,
# 22 MikeN said, “Now see if you guys can figure out the effect of raising the minimum wage…”
Less hiring and more off shoring. I guess that would drive housing even lower.
Yup. It looks like all the fast food places, pool cleaners, lawn cutters, hotel maids, and the other low end service sector will be off shore now.
Maybe you two idiots could explain that one.
# 24 Mr. Fusion said, “Yup. It looks like all the fast food places, pool cleaners, lawn cutters, hotel maids, and the other low end service sector will be off shore now. ”
I’ll gladly explain it to someone with no C level business experience. Labor costs aggregate in a business and are effected by labor costs in businesses they deal with.
I’m sure you can extrapolate the rest from here.
“more Americans signed contracts to buy homes in December despite widespread concerns about the economy, an industry group reported on Tuesday.”
But that was before the massive layoffs of this week.
Dead. Cat. Bounce.
And in other news, don’t you owe us a new installment of Horowitz eavesdropping?
Bobbo, that almost assumes everyone has a house.
#18 John if it just was a real estate bubble I would agree with you. But It’s a breakdown in the banking system. We will see new lows in the stock market in 2009. I’m thinking in August 2009. I do think you could buy a house now if you have 10 years and you will make out just fine. One thing to remember with real estate, It’s all location.
#25, Cow-Paddy,
Labor costs aggregate in a business and are effected by labor costs in businesses they deal with.
As usual and expected, you can’t answer. While I don’t know for your sure, history would tell us you are just blowing smoke out your rectal mouth again. That was another stupid comment from you and Lyin’ Mike to demonstrate you don’t know what you are talking about.