And just think, that bogus number is horrific without including the $100,000 in free upgrades, the $100,000 cash back at closing, the hawaii trip, the new car, or the free hookers and cocaine.
OK, I'm not sure if builders have resorted to free hookers and cocaine yet, but you know they've gotta be thinking about it. And again, one day, the MSM might pull their collective head out of their ass and report the overstatement of this Commerce Department number. Or not.
Bottom line: anyone who bought a new home in 2004 or 2005 during the housing craze - your builder is now completely and totally destroying your financial future in a scorched-earth-mother-of-all-firesales. Your comps will be ruined for years to come.
Real estate never goes down they said. This house will make a great investment - you'll make a killing. It's always a good time to buy they told you (before cashing their commission check).
In reality, Suzanne researched it, and you're fu*ked.
New Home Prices Fall by the Largest Amount in More Than 35 Years
WASHINGTON (AP) -- The median price of a new home plunged in September by the largest amount in more than 35 years, even as the pace of sales rebounded for a second month.
The Commerce Department reported that the median price for a new home sold in September was $217,100, a drop of 9.7 percent from September 2005.
It was the lowest median price for a new home since September 2004 and the sharpest year-over-year decline since December 1970. The weakness in new home prices was even sharper than a 2.5 percent fall in the price of existing homes last month, which had been the biggest drop on record.
The declines in prices served to underscore the severity of the correction in the once-booming housing market, which had seen sales of both new and existing homes soar to record levels for five consecutive years, propelled by the lowest mortgage rates in more than four decades.
October 26, 2006
FLASH: HOLY CRAP! New home median price crashes 10% (plus value of unreported incentives) - biggest decline in 35 years
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WOW. And if you take the incentives into account, the drop is 15%, 20%?
But, but, but...I don't understand, housing markets never fall. ;)
In general, in whatever stat numbers that are released, comparing this quarter to the same one of last year, or this month to the same of of that of last year.... I find it cheesy. It gets the big picture lost.
this is not to deny the decrease in housing prices, but a general rant.
annyway, that's good news.
a vicious cycle will now overtake as people panic and sell their homes making more people panic and sell their homes making more people panic and TRY to sell their homes
When there are no buyers and all sellers, that's when it may be time to buy again
Remain calm, everything is ok! I think I see the deathmobile gunning for Lareah.
Clearly, this is the bottom. I expect prices in mexifornia and Florida to increase about 25% over the next year.
So much for housing being "sticky" on the way down. This is going to get fugly.
This is the beginning of the epic plunge. Folks just wait till the next report. The NAR is going to crap a huge brick on it.
Important thing is that the mass media is noting the bubble.
Dam'd guys.
We reached the bottom and we are going to have anther 100% appreciation for the next 5 years. You have problem with that?
Where is my beer?
let's bet - how many months is the NAR going to call bottom?
it's tough to catch that falling knife they'll find out
that photo is classic:)
hey update from my neighbors who sold near me, they just bought a $499,000 home. He was telling me they had it up for $569,000 so that is a good drop.
But they left a $110,000 mortgage for $499,000...hahah! no thanks. Sure nice home 3 years old..but no thanks..And he is a construction worker. Good luck I said.
Look, the worst is probably over. The Fed have stabilised rates therefore affordability won't get any worse. What is more, by the middle of next year, rates will start to come down. Moreover, home sales have started to recover.
Besides only a tiny minority of people are actually taking a serious financial hit. Most who bought in 2005 are sticking with their new homes and waiting it out.
Five years from now, the market will be appreciating at a steady 5 percent a year. And everyone will have forgotten about this months price data.
So much for housing being "sticky" on the way down. This is going to get fugly.
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I think it's a lot more sticky for homedebtors than for builders. For the builders, it's just business, and it's better to make a litte, or at least not lose too much, than to lose a lot. Lots of FB homedebtors will ride the crash all the way down only to sell near the very bottom in a few years (if they don't get foreclosed on first) because they're holding out for a price they "deserve." I think what's happening with new home prices could be a pretty good window into the future of used home prices.
When Sir Ben comes charging to the rescue (in his white helicopter), the loosened monetary policy will be rocket fuel for the next leg up in gold, silver, oil, etc...
"Don't panic. But if you are going to panic, make sure you are the first."
Bleh, this is nothing. 2008 is the year the fuse hits the gunpowder, this is just warm up for the big ARM reset.
"Look, the worst is probably over. The Fed have stabilised rates therefore affordability won't get any worse. What is more, by the middle of next year, rates will start to come down. "
.............................
What makes you think that the fed has stabilized rates? What makes you think by next year, rates will begin to come down? Wishful thinking does not translate into reality.
Take a look at the 80's. Take a look at the fact that foriegn banks are looking to move out of the dollar. Do you know how the feds keep buyers interested in the dollar? They raise interest rates, so banks and indivduals purchase and hold dollars. Further more Bernanke has clearly stated he will not be cutting rates anytime soon.
Rather than all this wishful thinking, perhaps you should move into the acceptance stage and look to protect your house flipping investments or get out them if you are worried. Cycles go up and down...the reality is this is a downward moving cycle and will be for years and then yes...years in the future it will begin to appreciate again.
did you know Lareah in Gaelic means "Liar"
"Besides only a tiny minority of people are actually taking a serious financial hit. Most who bought in 2005 are sticking with their new homes and waiting it out."
To clarify your generalization, "a tiny minority of people" must be about 10% of the population, since about 10% of all the outstanding mortgages are due to reset over the coming year. It is very safe to say that at least half of those resets will result in a serious financial hit to the people who are trying to pay them off. Therefore about 5% of the population would take a serious financial hit. Personally, I don't think that 1 out of every 20 homeowners taking a serious financial hit, in the next year alone, qualifies as "a tiny minority of people".
"Besides only a tiny minority of people are actually taking a serious financial hit. Most who bought in 2005 are sticking with their new homes and waiting it out."
To clarify your generalization, "a tiny minority of people" must be about 10% of the population, since about 10% of all the outstanding mortgages are due to reset over the coming year. It is very safe to say that at least half of those resets will result in a serious financial hit to the people who are trying to pay them off. Therefore about 5% of the population would take a serious financial hit. Personally, I don't think that 1 out of every 20 homeowners taking a serious financial hit, in the next year alone, qualifies as "a tiny minority of people".
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It's much more than 10% in the bubble areas like Craplifornia. Basically, almost anyone who bought in the last couple of years used some form of suicide financing.
Housing is always going up. So if you don't get in now you will be permanently screwed. You better buy now or you will be priced out of the market.
You really think things are going to drop? Most everyone is going to hold onto their house and onto their asking prices.
If you don't buy now then next year when things rise again 20% or 30% you will be feeling really stupid.
I think every bad report that comes out for the next 5-10 years will have the same tired phrases being used.
keith, you're so negative. Why do you have to burst my bubble? No pun intended.....
Right about now I could really stand to see that posting that ends with
"the gains are permanent"
Slays me every time.
Please, whoever you are - hit it!
housing stocks up yet AGAIN on the news.
wages rising, job market booming, housing steady.
Rates low, just got a raise and rents are rising.
buying makes sense again
There's no next year bounce to this market. What you are going to have is next year pain! Especially for those buying this year, falling for the line that it will be up next year!
" keith said...
let's bet - how many months is the NAR going to call bottom?
it's tough to catch that falling knife they'll find out
"
Hey Keith,
They say when you keep picking the bottom, you end up with stinky finger.... ;-)
A look at the media response to this news (summary: almost totally ignored/downplayed).
You sound like used car salesmen. Let me show you a bargain! Look at all our wonderful cars! We are having a clearance sell and we are offering 50% off and throwing in power windows, power brakes, leather seats! What a bargain! They forget to tell you they are still making money cause the mark up was 100% before hand.
It is like going to any store with a sale. How often have you gone say into an antique mall and saw 25% off and then noticed the same item was marked up 25% from the last time you saw it. To an unsuspecting buyer they may thing, wow, a deal.
Or that 75% off clothing sale at a major department store? Lets see, made in China, cost maybe $20 to make an item they ask $500 for and then they mark it down to $100 and the ladies think, wow, look at this bargain!
The entire housing stock of America isn't static, nor were all the homes built, bought, sold at the same time either. Many Americans own outright, something like 40%. Others have owned ten years, twenty years, twenty five years and are almost paid off or are in good equity positions.
If you believe 50% or more of all Americans are mortgaged up to the hilt and have excessive personal debt than it must be because a lot of you doom and gloomers do! Don't judge other Americans and other home owners from your twisted, distorted and probably Californian perspectives.
idiots
you are all a bunch of idiots
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