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Thread: Home Sales Hit Record Low

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    Home Sales Hit Record Low

    Home Sales Hit Record Low - CBS News

    Sales of new homes plunged to a record low in January, underscoring the formidable challenges facing the housing industry as it tries to recover from the worst slump in decades.

    The Commerce Department reported Wednesday that new home sales dropped 11.2 percent last month to a seasonally adjusted annual sales pace of 309,000 units, the lowest level on records going back nearly a half century. The big drop was a surprise to economists who had expected sales would rise about 5 percent over December's pace.

    The January decline will heighten fears about the fledgling recovery in housing. Economists were already worried that an improvement in sales in the second half of last year could falter as various government support programs are withdrawn.

    A $1.25 trillion program from the Federal Reserve which has held down mortgage rates is set to end March 31 and tax credits to bolster home buying are scheduled to expire at the end of April.

    Though the overall economy started growing again this past summer, economists are worried because unemployment remains high. This weakness is causing consumers to shy away from spending, especially on big-ticket items such as homes.

    The Conference Board reported Tuesday that its Consumer Confidence Index fell almost 11 points to 46 in February, pushing the index down to its lowest reading since last April. At 46, the index is a long way from the 90 reading that economists generally view as depicting healthy consumer attitudes.
    Some comments:

    1. There are THREE leading indicators concerning the real estate market---home SALES, home VALUES and home FORECLOSURES.

    2. The latter is the most serious and also the most ominous.

    3. Home FORECLOSURES have exceeded 300,000 for 11 straight months.

    4. And virtually everyone in real estate concedes there's no bottom in sight for home FORECLOSURES.

    5. Now this: home SALES in January at an ALL TIME LOW.

    6. DOWN 11.2% from December.

    7. And selling at a rate that extrapolates to a miserable 309,000 new home sales over a 12 month period.

    8. These monthly economic reports---jobs losses, consumer spending, consumer confidence---time after time AP and the NY Times are forced to report new statistics (A) unexpected by "experts," (B) disappointing, (C) reversing a previous trajectory of recent improvement, and, therefore, (D) most foreboding forecasting forward.

    9. As for home VALUES---they're DOWN, too, minus 5.6% from Twelfth Month.

    10. And all this DESPITE $1.25 TRILLION dollars advanced by the Federal Reserve to hold down interest rates.

    11. DESPITE the $8000 tax credit for first time buyers, $6500 for existing homeowners.

    12. The credit ENDS in APRIL.

    13. The governmental PROPS will be removed NEXT MONTH.

    14. What's gonna happen then?

    15. They don't seem to have done MUCH GOOD, anyway.

    16. So much government---and NOTHING IS WORKING.

    The Prof
    Last edited by The Prof; 02-24-10 at 07:53 PM.

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    Re: Home Sales Hit Record Low

    Glen Beck just proposed a theory of world economies that I hadn't heard before that may explain some of this.
    "He who does not think himself worth saving from poverty and ignorance by his own efforts, will hardly be thought worth the efforts of anybody else." -- Frederick Douglass, Self-Made Men (1872)
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    Re: Home Sales Hit Record Low

    The government props will not stop next month. Two things, the chairman of the Fed said today that they will monitor what happens to the market so they may or may not stop. What will probably happen though is that Fannie and Freddie will step into the breech. The government will let them take on this debt which they will right off later and add to the national debt.

    On another note, the actions of the Fed largely had what the expected result. They slowed the slide of housing prices. Already 25% of mortgage holders are under water. This is one of the bigger reasons for foreclosures. If prices had been allowed to find their real market price, who knows how much lower they would have gone. It might have been better to take the hit at once, but the politicians did not want to deal with that.

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    Re: Home Sales Hit Record Low

    Quote Originally Posted by American View Post
    Glen Beck just proposed a theory of world economies that I hadn't heard before that may explain some of this.
    Do not under any circumstances listen to Glenn Beck for economic theory.
    He touched her over her bra and underpants, she says, and guided her hand to touch him over his underwear
    Quote Originally Posted by Lutherf View Post
    We’ll say what? Something like “nothing happened” ... Yeah, we might say something like that.

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    Re: Home Sales Hit Record Low

    listen to anyone you want to

    think for yourself

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    Re: Home Sales Hit Record Low

    Quote Originally Posted by Deuce View Post
    Do not under any circumstances listen to Glenn Beck for economic theory.
    Ever hear the saying "A stopped clock is right twice a day"?
    Education.

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    Re: Home Sales Hit Record Low

    Quote Originally Posted by The Mark View Post
    Ever hear the saying "A stopped clock is right twice a day"?
    He's a digital clock blinking 88:88.
    He touched her over her bra and underpants, she says, and guided her hand to touch him over his underwear
    Quote Originally Posted by Lutherf View Post
    We’ll say what? Something like “nothing happened” ... Yeah, we might say something like that.

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    Re: Home Sales Hit Record Low

    Quote Originally Posted by Deuce View Post
    He's a digital clock blinking 88:88.
    Sounds like there's an error somewhere in it's workings...
    Education.

    Sometimes I think we're alone. Sometimes I think we're not. In either case, the thought is staggering. ~ R. Buckminster Fuller

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    Re: Home Sales Hit Record Low

    I would imagine that the very cold weather much of the nation experienced in January put a drag on home sales for the month more than anything else. After all, in the middle of a blizzard you are probably not thinking "hey lets go look at houses".
    Last edited by SouthernDemocrat; 02-24-10 at 10:07 PM.
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    Re: Home Sales Hit Record Low

    Quote Originally Posted by SouthernDemocrat View Post
    I would imagine that the very cold weather much of the nation experienced in January put a drag on home sales for the month more than anything else. After all, in the middle of a blizzard you are probably not thinking "hey lets go look at houses".
    Probably accounts for much of Jan's drop

    But lets be realistic. With the large level of unemployement the US has, continued foreclousures going on, a large supply of unsold preexisting homes that have not come onto the open market for sale and of course the large supply of unsold preowned homes to begin with, I doubt new home sales will be increasing in the near future.

    The economic problems the US faces right now have not been fixed, just papered over with a massive amount of paper

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