WP: New Data, New Record In a Housing Market That Defies Predictions

[DeepModem Mom]

New Data, New Record In a Housing Market That Defies Predictions
By Sandra Fleishman
Washington Post Staff Writer
Thursday, August 25, 2005; Page D01


....On Tuesday, some analysts said the boom was definitively going south, based on a report from the National Association of Realtors that sales of existing homes slipped 2.6 percent from June to July.

Yesterday, however, the Commerce Department reported that new-home sales hit a record high in July, up 6.5 percent from June. That sent some pontificators the opposite way, saying the boom lives on....

***

Some who have been predicting a gradual slowing of the robust housing market rather than a dramatic pop say they remain upbeat because mortgage rates are holding steady and because July's dip in existing-home sales was small and its jump in new-home sales strong....

***

Analysts who have been seeing darker clouds ahead, however, say the reports do not allay their fears. They cite not only the drop in sales of previously owned homes but also data showing an increase in inventory of such homes, to the highest level since 2003, and a 5 percent drop in sales of condos.

And they note that the Commerce Department yesterday found that median sales prices of new homes had fallen for the third time in a row, to the lowest since December 2003....


http://www.washingtonpost.com/wp-dyn/content/article/2005/08/24/AR2005082400437.html

[displacedtexan]

1. Add this to that...

This guy posted this a Kos this week...

Part of what I do is trade securities. As a trader, I look at certain intangible factors in the market that I cull from news sources. What the information below tells me, as a trader, is: 1.) A lot of people are looking to sell their houses right now. 2.) Industry insiders (people in the know) are selling their shares in home building stocks, 3.) Foreclosures are creeping up. Together, all these factors could be read as the beginning of a top in housing, or the beginning of a downtrend. At the very least, they indicate a certain exhaustion of the market.

http://bonddad.dailykos.com/story/2005/8/23/93040/6800

#2 is pretty scary.

[cliss]

4. Thanks for the info.

I always appreciate hearing from people in the industry. Their information is always better than say, government reports, or statements from the real estate industry. I say "industry" because it sustains so many people, and they have a vested interest in keeping it going.

It looks to me like the market is going to start contracting. Prices should start coming down if a lot of people are going to put a "For Sale" sign on their yard.

And really, there are SO many signs our economy is nothing than a hollowed-out shell. In California, houses are geing bid up astronomically. It's really just the traders, who are involved in out-bidding each other, and just pumping up the market higher and higher. There's no real strength to this.

PLUS, don't forget the enorous problems over at FNMA and GNMA. These two organizations are rotten from within. They've been trying desperately to keep a lid on this for about 2 years. There's massive corruption there. They're afraid to leak this info, because it might start a housing crash.

Who knows? What comes up must come down.

[oneold1-4u]

2. Big houses

People want to get the biggest and best at any cost (huge mortgages)because they can get them today.
If a revolution goes the way it did in Russia, then all the poor of the country will destroy them or move into them. Everyone needs to consider history of a once rich, ambivalent, apathetic, government that made slavery of the peasant population. That population, in the US today, is losing more of what they have every day! Medical, SS, SSI, schools, military medical care, and the rights to move somewhere else are being removed from this "democracy" quietly.

[stoplightcat]

3. Hmm.

Sometimes I think we lose a little bit of perspective on here. To me, it's just a replay of Reagan's era of the 80s all over again. These things go in cycles. We had the same type of run-ups in the housing market in the 80s, then it went bust. Social Security was in "crisis" under Reagan, failing schools, etc. My hope is that the public will finally understand what these monsters do to this country when they rule our government.

[reprobate]

5. There IS a difference. Under Ray-gun your vote still counted.

And 57,000 minority voters were not striken from the voter roles at the behest of one party.

I believe that there is a growing anger building in this country at the constant upward redistribution of wealth and the stripping of the middle class, of all ethnicities.

Also, remember that the psychology of the mob should be taken into account. The country is really one big mob at heart, everyone looking for as much as he can get. Just a minor spark is necessary to set it off into revolution. And this is the most armed nation in history.

One of thesse days the media will latch onto the big story of Americans being sent off to war and dieing for the small group of neocon traitors. And I believe that the connection to LIHOP in 9/11 will be revealed aat the same time. That may be the spark that sets them off. The media may list to the right, but they are still whores that dribble bodily fluids at the thought of a sensational story that will sell more papers.

[cliss]

6. I believe

you could be right. The fools in Washington think the American public can be stepped on indefinitely....

Like you wrote, this is one HEAVILY armed population. I think Americans are tough, deep down. They've just been abused for so long, that they've gotten used to it.

But one day.......when they overstep the line in Washington....watch out. I think that day is coming, sooner than we think. I think gas prices are the Achilles Heel of this country. Screw around with peoples' ability to drive, and you've got trouble.

Think of a forest, in the middle of August. The floor is tinder-box dry. It's ready to blow at any moment. Then, in a moment of carelessness, someone throws a lit match....

[reprobate]

7. Yes, and I know the one stupid enough to light it. His name is George.

[DeepModem Mom]

10. Thanks for posting, stoplightcat -- and welcome to DU!

[David Zephyr]

8. LA Times Biz Section: Only a tiny fraction of all mortgages interest only.

Contrary to urban myth, the great majority (over 75%) of all homes are either owned outright or have conventional 30 or 15 year fixed loans, and of the small percentage that have adjustable ARMS only a fraction of those are "interest only".

Unfortunately, many of the doomsayers with questionable motivations have been trying to profit in the Options Market by selling short REITS (Real Estate mutuals) and may have gambled themselves into a losing deadline as July once again revealed double digit appreciations in many areas of the country and August is looking just as strong. Consequently, we see a lot of bad mouthing the real estate market within internet forums as these poor folks who gambled in the Options Market on a housing crash will be the ones coming up short now...in spite of all of their (understandable) attempts in internet forums to scare/drive down the housing market.

Mortgage rates, while not at the rock-bottom levels they were just a few months ago, are STILL AT HISTORICAL LOWS and with the stock market so dicey, with the U.S. Dollar still in the dumps, the best commodity to buy still seems to be the REAL thing: REAL Estate.

Will Rogers: Buy land, they don't make it anymore.

[Jackpine Radical]

9. Put together 2 facts from the article for the answer:

1) the Commerce Department reported that new-home sales hit a record high in July, up 6.5 percent from June.

and 2) median sales prices of new homes had fallen for the third time in a row, to the lowest since December 2003....

And there you have it. A lot of people gave up trying to sell their houses at the prices they wanted, and dropped the prices. That set off a wave of bargain-hunting as others went out to take advantage of the lowered prices.

This is not good news for people heavily invested in real estate.