I'll say it again. Anyone buying a home in America today is a fool. But it looks like most people have come to terms with that, and are walking away from deposits so as not to make the worst financial decision of their lives. Bravo.
It's always fascinating to watch the end of a financial mania, where the object of desire (tulip bulbs, pets.com stock) that was soooooo desirable just a few hours ago is suddenly seen as simply disgusting.
We're there with housing. From "Manias, Panics and Crashes: "The final phase is a self-feeding panic, where the bubble bursts. People of wealth and credit scramble to unload whatever they have bought at greater and greater losses, and cash becomes king."
Now here's an update from move.com:
A little over a year ago, buyers couldn't wait to sign contracts to purchase homes. Now, many can't wait to get out of them.
With real-estate prices falling around the country and even pro-industry trade groups predicting further declines over the next year, buyers are backing away from deals in droves.
At a semiannual housing forecast conference in Washington, D.C. recently, economists reported that contract-cancellation rates for big builders were running around 40 percent Â about twice as high as last year's levels. Anecdotally, real-estate professionals say they are seeing a similar dynamic in existing-home sales.
"There are a whole lot of people running from contracts," says Alexandria, Va., real-estate attorney Beau Brincefield.
November 15, 2006
Posted by blogger at 11/15/2006