Author Topic: Home Sales See Biggest Monthly Drop In 40 Years  (Read 954 times)

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Offline thundley4

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Home Sales See Biggest Monthly Drop In 40 Years
« on: January 25, 2010, 10:27:00 AM »
Quote
Sales of previously occupied homes took the largest monthly drop in more than 40 years last month, sinking more dramatically than expected after lawmakers gave buyers additional time to use a tax credit.

The report reflects a sharp drop in demand after buyers stopped scrambling to qualify for a tax credit of up to $8,000 for first-time homeowners. It had been due to expire on Nov. 30. But Congress extended the deadline until April 30 and expanded it with a new $6,500 credit for existing homeowners who move.

"It's 'exit stage left' for first-time homebuyers," wrote Guy LeBas, an analyst with Janney Montgomery Scott.
NPR

Not good news, I'm thinking. Lord Zero doesn't understand that artificially supporting home sales or car sales eventually makes things worse.

Offline NHSparky

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Re: Home Sales See Biggest Monthly Drop In 40 Years
« Reply #1 on: January 25, 2010, 01:01:59 PM »
Cash for clunkers, two-story Cape style.

Face it, the demand is no longer there, and when it isn't, the bubble bursts yet again.  Look for another nosedive in home prices later this year between this lack of demand and the second wave of foreclosures.
“Any man who thinks he can be happy and prosperous by letting the government take care of him better take a closer look at the American Indian.”  -Henry Ford

Offline debk

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Re: Home Sales See Biggest Monthly Drop In 40 Years
« Reply #2 on: January 25, 2010, 02:52:01 PM »
It's really grim out there.

I have a couple of good listings....and not getting even phone calls.

Part of the problem is that people are too worried about keeping their jobs. Those that may be considering moving up aren't, they are making do with where they are by updating, redecorating, adding on.

The first time buyers are too scared to do anything. Also, most of them get FHA loans and as of Jan 1....a seller is only allowed to help in buyer closing costs up to 3%. It was 6%.

Now this may not sound like a big deal but it is.....and it's screwy logic.

Fannie Mae (FHA) requires that a buyer put down 3.5% of their own money (or gifted) as down payment. They were thinking of raising it to 5%. That would be a 1.5% increase.

Instead....they lowered the allowable seller paid closing costs from 6% to 3%. That's 3% more that the buyer has to come up with.

 :thatsright:

For many first time buyers....that additional 1.5% is a lot of money when added to all the additional expenses that are incurred with moving into a house.

It would have been better to increase the downpayment amount.

Lending laws underwent extensive changes. I know the banks are in self-protect mode...but they went into overdrive. Even my long time investors have been drastically affected. 3 weeks ago their lender was willing to give them $30k on a property...last week, he switched it to $10k....and their financial status hasn't changed one bit! :(

There also hasn't been much advertising regarding the stimulus continuing.

Also....December, besides being the holidays.....was a month of incredibly wicked weather across most of the country. And it continues...who wants to go house shopping in wicked weather?
Just hand over the chocolate...back away slowly...far away....and you won't get hurt....

Save the Earth... it's the only planet with chocolate.

"My therapist told me the way to achieve true inner peace is to finish what I start. So far I've finished two bags of M&M's and a chocolate cake. I feel better already." – Dave Barry

A balanced diet is chocolate in both hands.

Offline NHSparky

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Re: Home Sales See Biggest Monthly Drop In 40 Years
« Reply #3 on: January 25, 2010, 02:54:04 PM »
And it's going to get worse before it gets better.  I'm guessing the home development behind me is going to slow to a crawl, or just stop altogether.
“Any man who thinks he can be happy and prosperous by letting the government take care of him better take a closer look at the American Indian.”  -Henry Ford

Offline The Village Idiot

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Re: Home Sales See Biggest Monthly Drop In 40 Years
« Reply #4 on: January 25, 2010, 02:58:26 PM »
OTR trucking apparently dropped 44% between Dec 2008 and Dec 2009

Does this sound like a recovery yet?

Offline NHSparky

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Re: Home Sales See Biggest Monthly Drop In 40 Years
« Reply #5 on: January 25, 2010, 03:04:29 PM »
And I just found out this morning that my cousin has just been diagnosed with Type II Diabetes, and can't get his wrist surgery yet until its under control.  Oh, but he's losing his health insurance in two weeks because the UNION he's a member of says he hasn't worked enough hours, because there's no work (he's a carpenter).

Hope and change, kids.
“Any man who thinks he can be happy and prosperous by letting the government take care of him better take a closer look at the American Indian.”  -Henry Ford