Sure, we've still got some corrupt fools out there cheerleading, or saying we'll get right back to party-on in just a couple of months (Lereah, Appleton-Young, the corrupt idiot at Harvard, Bernanke, etc).
But you can't hide from reality, and the reality is that the greatest Ponzi scheme of all time is over, only an ignorant fool would be out buying a home today, and prices will now drop right back to (or below) the historic mean.
Here's the view from LA, of a meltdown that has now spread nationwide, soon to be worldwide.
So I guess it's official: The real estate market is tanking. On Monday, the National Assn. of Realtors reported that, for the first time in a decade, the average price of a U.S. home actually declined. In California, sales of existing homes in August were down 30.1% from August 2005, which is the steepest year-over-year drop in almost 25 years.
But like children, houses are highly efficient delivery systems for denial. Just as no parent would admit that his or her offspring — no matter how costly, ill-behaved or intimately acquainted with the juvenile justice system — is anything other than a source of unmitigated joy, people who own their homes will tell you that the market is just fine. Best to listen to National Assn. of Realtors chief economist David Lereah, who said in a quote in this paper Monday: "This is the price correction we've been expecting — with sales stabilizing, we should go back to positive price growth early next year."
Hey, great! Problem is, that same article also quoted another economist who said that "the speed of the collapse has been astonishing" and predicted "no chance of any short-term relief." Translation: If you're a renter, you now have permission to be as self-satisfied as the homeowners who once taunted you with their dizzying appreciation rates. As for us owners, we can just cover our ears and sing "Correction! Correction! I can't hear you!" until things start looking up again.
Call it a correction or call it a crash. Either way, the party's over.
September 30, 2006
It's getting a bit surreal, reporting on the housing devastation underway. Who'd of thunk it'd happen so fast?
Posted by blogger at 9/30/2006