By DAVID KOENIG, AP Business Writer
1 hour, 14 minutes ago
DALLAS - The five-year housing boom is indeed over, judging from growing statistical evidence and the performance of some of the nation's leading builders, and the slowdown is already rippling through the economy.
In the last week, the Commerce Department reported that January sales of new single-family homes fell 5 percent — the fourth decline in seven months — and the backlog of unsold new homes hit a record. And the National Association of Realtors said used home sales slipped 2.8 percent in January, the fourth straight drop and 5 percent below January 2005.
Builders also reported a few hiccups. Upscale Toll Brothers Inc. said signed contracts in the November-January period fell 21 percent from a year ago, and KB Home reported more buyers backing out of contracts.
Still, the prospect of a housing slowdown appears less frightening than it did a few months ago, according to those who track the industry. There seems to be little concern that a much-touted housing bubble will lead to a collapse in sales and prices.
New Federal Reserve Chairman Ben Bernanke said last month housing would enter a moderate slowdown but not a crash.
We'll see about that...
(These folks are clueless.)
Posted: Mon Mar 06, 2006 4:11 pm Post subject: Re: Housing Boom Officially Over - Collapse Imminent
They always like to talk about a "cooling" of housing prices. Of course now people can't pay for stuff with equity and their over thier heads in debt, what are they going to do?
If there is a sudden collapse it will the begining of a great depression.
Joined: Jun 18, 2005 Posts: 3526 Location: In a van down by the river
Posted: Mon Mar 06, 2006 4:28 pm Post subject: Re: Housing Boom Officially Over - Collapse Imminent
Well there is also the huge problem of the fact that in the areas where the Housing boom went the most nuts there were a lot of variable rate loans made.
We have a Fed that has been forced to raise rates because of inflation, inflation is not slowing down because of higher energy costs.
My magic eight ball tells me that the Fed will have to keep raising rates and all those poor suckers who thought it would be great to buy a 2 bedroom in San Fran for 1,000,000 will be unable to pay because the rate on their loan keeps going up.
And their friggin job was just outsourced to India, now VJ in Bombay is driving their BMW and just bought a new house for 15,000 thousand bucks. He is excited to be doing their job too even though he is making a tenth what they were. God help him when the company he works for that sells computer products in the US has to close because no one is buying computer stuff anymore. Then Vj will be thrown out on his ass and he will join some Madras and then blow some shit up in America completing the circle.
Welcome to the New World Order, outsourcing is good for the economy war is peace freedom is slavery and ignorance is strength.
Joined: Oct 12, 2004 Posts: 945 Location: Giant Pickup Truck Country
Posted: Mon Mar 06, 2006 4:38 pm Post subject: Re: Housing Boom Officially Over - Collapse Imminent
FireJack wrote:
They always like to talk about a "cooling" of housing prices. Of course now people can't pay for stuff with equity and their over thier heads in debt, what are they going to do?
If there is a sudden collapse it will the begining of a great depression.
If they stop building more suburbia we'll find out if J H Kunstler is right about the importance of suburban growth in our economy. How many of our existing houses are occupied by construction workers, furniture and appliance makers, landscapers, curb and gutter guys, etc. who will default on their own mortgages almost immediately if they get laid off? When they all move back in with their parents leaving thier houses vacant, how is that going to further affect new home construction? _________________ The knowledge to survive post peak will not come from our laboratories. It will come from our museums.
Posted: Mon Mar 06, 2006 8:57 pm Post subject: Re: Housing Boom Officially Over - Collapse Imminent
it won't be officially over until CNN announces a year over year decline in housing values.
Even though the bubble started to fall apart in June, CNN still manage to tout a 13% YoY increase in prices. We'll probably get our first Year over year decline in April or May (prices went nuts last year at that time, and they're really goind down fast now) _________________ Angry yet?
Posted: Mon Mar 06, 2006 9:09 pm Post subject: Re: Housing Boom Officially Over - Collapse Imminent
Hey, maybe my property taxes will go down!
Every cloud has a silver lining right? _________________ "Battle not with monsters, lest ye become a monster, and if you gaze into the
Abyss, the Abyss gazes also into you."
Ammo at a gunfight is like bubblegum in grade school: If you havent brought enough for everyone, you're in trouble
Posted: Mon Mar 06, 2006 9:20 pm Post subject: Re: Housing Boom Officially Over - Collapse Imminent
FoxV wrote:
it won't be officially over until CNN announces a year over year decline in housing values.
Even though the bubble started to fall apart in June, CNN still manage to tout a 13% YoY increase in prices. We'll probably get our first Year over year decline in April or May (prices went nuts last year at that time, and they're really goind down fast now)
If you look at new home sales there was a year-over-year price decline from January 2005 to 2006.
Joined: Jun 18, 2005 Posts: 3526 Location: In a van down by the river
Posted: Mon Mar 06, 2006 9:32 pm Post subject: Re: Housing Boom Officially Over - Collapse Imminent
Really, Mekrob? I thought India was all muslim.
Give me a friggin break
India only has about 120 million muslims, one of the largest muslim populations on earth. and Hey guess what, you are wrong there are Madrasas all over India and they are getting a lot of attention from the Hindus because they are educating people and teaching fundamental Islam.
Granted Vj is not a very muslim sounding name so I will rename him Muhammad does that suit you better?
Posted: Mon Mar 06, 2006 10:58 pm Post subject: Re: Housing Boom Officially Over - Collapse Imminent
Hi Everyone,
My problem here is that I know someone who works at one of the largest kitchen/bath countertop makers in the country and they are still running their lines flat out. Just the line he works on makes 900-1000 12’ slab tops in an 8 hour day, and the place has 4 plants with a total of 10 such lines. So they look to be cranking out between 8000 to 10,000 counter tops in a normal day. And they’ve been working overtime here the last few weeks.
What gets me is that this place is usually a leading indicator of a slow down in the housing market. I can understand why their Gulfport, Mississippi plant is running full tilt, but the other plants are not shipping to the hurricane areas. Most of the tops coming out of the plant here are headed to the east coast.
Also, they had no January slow down in business as they usually do. The company marks the increase in January business to the good weather. But maybe there is another reason. Maybe these the tops are going into housing project already under way and the investors are trying to finish as quickly as possible so they can still sell their inventory of homes before any major price crash.
Anybody else have any ideas on this?
Duke of Indiana _________________ I'd rather get my brains blown out in the wild than wait in terror at the slaughterhouse.
Craig Volk, Northern Exposure, A-Hunting We Will Go, 1991
Posted: Mon Mar 06, 2006 11:37 pm Post subject: Re: Housing Boom Officially Over - Collapse Imminent
Well, about a year after the housing market slumped the foreclosures started hitting here in Sydney, Australia (we were a little ahead of the curve, also fewer idiots used ridiculous financing options). From what I'm reading, that'd be about to occur right about now over there.
Joined: Dec 02, 2005 Posts: 6054 Location: Oil-addicted Southern Californucopia
Posted: Tue Mar 07, 2006 12:11 am Post subject: Re: Housing Boom Officially Over - Collapse Imminent
We live in a townhouse development about 2 kilometers from the ocean. We bought our place in 1991 for $310,000. Last fall an identical unit went for $745,000. Sellers hardly even had to put "For Sale" signs out. RE agents had buyers lined up. Units were gone in 48 hours.
Now, nothing is selling. Two units near us have been on the market for two and three months, respectively. Word in the neighborhood is that every unit in the complex has lost at least $75,000 in value since last fall.
We're watching our net worth take a huge hit, but what's our option? If we try to sell cheap we'll have to buy something else, then sit and watch its value dissolve underneath us.
Posted: Tue Mar 07, 2006 12:33 am Post subject: Re: Housing Boom Officially Over - Collapse Imminent
Zardoz wrote:
.....
We're watching our net worth take a huge hit, but what's our option? If we try to sell cheap we'll have to buy something else, then sit and watch its value dissolve underneath us.
Posted: Tue Mar 07, 2006 2:05 am Post subject: Re: Housing Boom Officially Over - Collapse Imminent
One of my friends just moved into a beautiful 30-story luxury doorman rental on 28th off broadway, prime Manhattan real estate, opened almost a year ago but told me vacancy rate's around 35%
5 years ago in that area, rentals got filled before construction ended.
Another friend who I buyer brokered a one bed co-op in east midtown engineers for a company currently finishing a high-end condo right on central park south, the cheapest starts around $4 million and of the 60 units only 40 are sold. Even the upper class markets cooling off.
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