MaxedOutMama
Thursday, December 28, 2006
More Later, But Two Things
Neither the existing home sales release or the new home release looked very encouraging to me. I'm with Rosenberg, per Sperling, hat tip The Housing Bubble Blog:
The carnage in the funny money capitals is just beginning. This will be historic.
If you need a good laugh after that, Casey Serin just discovered that a bank might offset overdue payments on a credit line with funds in his checking account.... He's outraged! The bank picked his pocket!
In a Nov. 27 comment, Rosenberg notes that in addition to the record 4.3 million residential units for sale as of October, there were 1.95 million home completions, the 12th-highest month since 1979. Units under construction were through the roof as well. Rather than seeing supply dwindle and prices start to firm up in early 2007, Rosenberg says ``it could be a year before the reduction in starts begins to put a meaningful dent into the inventory backlog.''More about the actual releases later, but for now I encourage you to check reality through the Housing Tracker, which aggregates list prices. Check out San Diego, for example, and see what a 3.1% year over year decline in price actually means.
John Mauldin, an investment adviser and frequent contributor to Investors Insight, a financial-data publisher, throws an extra log on the fire. According to Mauldin, even the current projection of housing sales may be overstated and thus the existing supply of homes greater than what is reported in the official data. The reason is that the Census Bureau, one of the Commerce Department's statistical agencies, fails to account for cancellations in home sales contracts. Cancellations ran as high as 40 percent for some major homebuilding firms last quarter.
- The 75th percentile listing on August 14th, 2005, was $758,000. As of December 28th, the 75th percentile lists at $700,000.
- The 50th percentile listing on August 14th, 2005, was $545,000. As of December 28th, the 50th percentile lists at $499,000.
- The 25th percentile listing on August 14th, 2005, was $410,990. As of December 28th, 2006, the 25th percentile lists at $375,000.
The carnage in the funny money capitals is just beginning. This will be historic.
If you need a good laugh after that, Casey Serin just discovered that a bank might offset overdue payments on a credit line with funds in his checking account.... He's outraged! The bank picked his pocket!
