May 24, 2007

FLASH: New home prices crash at least 11% nationwide while sales fall 10% VERSUS LAST YEAR

UPDATED - chart from housingdoom (that the MSM won't show you)


For the "there is no housing bubble" and "home prices never go down" crowd, today's numbers should drive a stake through their hearts.

And to think we're still just getting started. It's a long, long, long, long, long way back down.

However, watch the MSM and NAR spin today's numbers (VS. LAST MONTH) as good news, and that we're "bottoming out". How many times can we "bottom out" until they realize the bottom is not even in sight? And when will they finally think for a change and do year over year comparisons, the only real thing that matters?

Also, keep in mind these numbers from your government are untrustworthy, have a massive margin of error, and don't even include the use of builder incentives, which we know are massive. So take 'em with a grain of salt - even though it's obvious sales are overstated and prices are down much more than reported.

WASHINGTON, May 24 (Reuters) - Sales of new U.S. homes rose 16.2 percent in April, the sharpest climb in 14 years, while prices fell a record 11 percent, according to a government report on Thursday that showed home builders taking extraordinary steps to move houses.

New single-family home sales rose to an annual rate of 981,000 units from a revised rate of 844,000 in March, the Commerce Department said.

Analysts polled by Reuters were expecting April sales to rise slightly to an 860,000 unit pace from a previously reported rate of 858,000 units in March.

In April, the median sales price of a new home fell $28,500 to $229,100 from $257,600 in March. That's the lowest price for a new home since September 2006 when the median sales price was $226,700.

The previous record decline was a 9.4 percent fall-off in September 1981. Compared with a year ago, April's sales price was off 10.9 percent -- the fourth-largest decline ever. The record 14.6 percent decline was set in July 1970 and the next three largest falls occurred in that same year.

131 comments:

Anonymous said...

What is "MSM"? Anyhow, since this news is posted on frontpage of CNN, people don't look at the negative. Some people only look at the positive, in which home sales are the "best in 14 years". That does put a very positive spin on things.

Anonymous said...

New home sales up 16.2%! Biggest INCREASE in 14 years. So much for you housing crash. Looks like the spring selling season just rebounded in a big way. When will you suckers admit you were wrong?

Eman said...

Nevermind - a "record" 11%.

Anonymous said...

Given that the sales increased so much in the NE and were down everywhere else, couldn't the lowering of the median just reflect the change of sales mix and not a 11% reduction in price of all homes sold?

Anonymous said...

.
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I predict that some realtwhore troll will trumpet the fact that new home sales jumped ignoring the historic price drop it took to achieve the jump; ignore the huge drop in profit Toll reported today and say something trite about how great the stock market is doing. Of course it will end with some spite based comment about HPer's and/or renters.

Anonymous said...

Yes prices fell hard, but buyers responded to the price drops too. You can't just dismiss the increase in sales as spin.

Isn't the whole idea of sitting on the sidelines to get a good deal? Well if prices are down 11% and probably at least another 5% when including incentives, why the surprise or disbelief that people are buying? I would expect nothing else to happen. And gee what a surprise, price down 16%, sales up 16%...who woulda thunk it?

keith said...

Here's how the news is being reported in London - from the Times:

US house sales soar on dive-bombing prices

Number of new American homes sold booms in April but only after the biggest drop in prices since 1970 housing crisis

The figures the fastest rise in numbers sold in 11 years, showed that house builders were having to offer massive discounts to offload unsold homes.

hhh said...

this helps kill the resale market (die flippers!)

burn baby burn said...

How can this be home prices never go down?

Anonymous said...

KEITH, you spent a few days knocking median price as unreliable when median goes up. What makes it so reliable now that it's going down?

Anonymous said...

"The previous record decline was a 9.4 percent fall-off in September 1981."

And how did 1982, 1983, 1984, 1985, 1986, 1987 and 1988 do? Prices went sky high if I recall.

Since it's never different this time, 2008-2013 are looking pretty good.

Anonymous said...

In the TH development that I live in in NOVA, where 10 properties have been for sale for the past 2-3 months with no movement (2 since October), only 1 has gone under contract, and the one for rent is still for rent. So, I really have not seen any uptick in number of sales in my hood.

Anonymous said...

Sucker's rally...

Anonymous said...

Can someone please tell me what "MSM" stand for?

wingnut said...

NEWS FLASH

The Bank of China has $1.5 TRILLION. They are putting $400 BILLION of that into an investment fund. They are going to loan another $350 BILLION to business interests that support their goals.

1) The U.S. stock market is going nowhere but up, because a big chunk of that $400B will wind up there.

2) U.S interest rates are going down to historically low rates because the Chinese will loan whatever it takes to keep our housing market and economy from tanking. The details of this deal are being settled in a meeting between the BoC, Treasury, and the Fed.

Don't believe me? Then check out what Bill Gross (PIMCO) is saying these days. He drank the koolaide and now says we have nothin' to worry about...

Anonymous said...

yeah, the builders have the idea but the private owners are still stuck in 2005. lets see, buy a new place or pay more for a used place......they best lose the denile.

Anonymous said...

two sided coin, record sales jump , record price drop....bears will ignore one side, bulls will ignore the other...let the arguing begin

keith said...

Nothing makes this government report reliable. Nothing.

But if you want to see what's happening to home prices, go to a new home development.

$100,000 off? no prob. Free upgrades? no prob. 0% financing? no prob. 2003 price? No prob.

Then go talk to recent homedebtors who bought in these neighborhoods (the ones that haven't been foreclosed on yet) and listen to what they have to say.

It ain't pretty

keith said...

funny how a 10% decline from last year and a massive decline in price is picked up by so many MSM as home sales soar

We live in bizarro world. Up is down. Black is white. According to the MSM (main stream media for the uninitiated)

And the sheeple believe it. But not HP'ers. Can't fool all of 'em all the time

Anonymous said...

So let's recap. 2001-2006 price up 100%. 2006 to 2007, pric down 11%. Yep it sure was a dumb idea to buy a home. I'm so jealous of you renters.

Anonymous said...

Trolls, for heaven's sake look at the year over year numbers...10% DOWN from last year. Sheesh, get a clue.

Anonymous said...

BWA HA HA HA!!! 16% losers. read it and weep.

RayNLA said...

Anonymous said...

Can someone please tell me what "MSM" stand for?



Only if you promise to stop posting as Anonymous!

And know that when it comes to the Housing Crash you can never trust the MAIN STREAM MEDIA to report the facts.

RayNLA

burn baby burn said...

Anonymous said...
So let's recap. 2001-2006 price up 100%. 2006 to 2007, price down 11%. Yep it sure was a dumb idea to buy a home. I'm so jealous of you renters.

This is going start a race to the bottom. How much can you cut off of the price before it starts to hurt big time? You had better do it now because next month your house is going to be worth less and less the longer you hold it the less it will be worth. Once people figure that out they will become desperate to sell before they lose another 16% or more each month. Stop posing annon and grow a pair.

Anonymous said...

Let us not forget:

New home sales are almost always upstaged by the more reliable #s and more telling existing homes data. Existing homes represent a much larger segment of the market--about 85% of total sales--and they're recorded at the settlement, or once the keys change hands. The data comes out tomorrow

New homes, on the other hand, account for the other 15% of sales, and are recorded when a contract is signed.

Can't wait for tomorrow's data!

Anonymous said...

What is included and omitted in the sales data?

What is included and omitted in the price data?

Do they include foreclosure and sheriff sales in the sales data?

Are the incentives and forecluse and sheriff sales omitted from the price data?

I think the numbers here probably have been Enroned. Someone needs to examine this report to see what really is happening in the market.

Anonymous said...

Der... fine I won't trust the mainstream media but what does MSM stand for?

Stephen said...

"two sided coin, record sales jump , record price drop....bears will ignore one side, bulls will ignore the other...let the arguing begin"

---------------------------

You're probably right. But remember that this "record sales jump" is MoM, not YoY. YoY is way down from 2006, which was also down from 2005, and YoY is the more significant figure.

The MoM increase reflects massive (and probably underestimated) price declines, as well as the large MoM declines that had been occurring up to that point. It is also reflective of the large number of spec homes that continue to be built; I think the sheer number of these vacant homes on the market must boost the sales volume somewhat.

Long story short, the 16.2% increase is not significant.

jymkata said...

Anon post May 24, 2007 6:11 PM

So let's recap. 2001-2006 price up 100%. 2006 to 2007, pric down 11%. Yep it sure was a dumb idea to buy a home. I'm so jealous of you renters.
___________________________________

I remember saying the same thing about the Nasdaq in 2001. Look how that turned out...

Anonymous said...

nice spin Al-QWAFFER. When sales jump 16% you can kiss your so called crash buh-bye. At the end of the day it was a 10% correction in prices...pretty much what most analysts predicted. It took 2 years to happen, again what most analysts predicted. Just admit a 1/2 victory and get on with it.

Now you can concentrate on the next non-story of 2007...Ron Paul.

Doktaire said...

Ugh!! The MSM is reporting an INCREASE, when in fact year over year it is a DECREASE, wtf is wrong with these people! There is no point comparing April to March, we all know that April sales will be higher then March in any given year, as it is the spring selling season. What is more important is that the median price has dropped, and sales are STILL down over last year. I really do despair for the future of America, we are a bunch of ignorant, pig-headed, greedbags, what kind of future does a group of people like that have?

Mark in San Diego said...

50% Haircut in Sacramento - that is spreading fast around the country - Phoenix now has 60,855 homes on the market (MLS not including new homes). . .If I owned, I would give my house back to the bank, and then buy the half-price one next door in foreclosure. . .the fact that the half-price homes (see previous newsclip) didn't sell, says it all.

anonymous wimp said...

Well, gosh, I guess I should go back in time to when I was in COLLEGE to buy a home in the year 2000.

Idiot.

It sure was a bad idea to buy a home 2004 to now. When to take the plunge back in? When inventory starts to shrink and prices stop their free-fall.

The next best thing is to RENT until prices get rolled back further.

Anonymous said...

OK 16%+ MOM and 10%- YOY. I don't know why YOY matters that much. April 2006 was still at the tail end of the boom, I think May 2006 was the highest median price. So 10% below a boom month doesn't mean much to me, of course it will be lower.

What will matter to me is comparing Sept/Oct/Nov 2006 vs. 2007. By fall of last yeat the slowdown was well under way. If sales are worse in 2007 than 2006 then the slowdown is getting worse. If sales are better then you can say last yeat was the bottom and things are going back up. I'm not making any predictions either way, just saying looking at April data doesn't say much.

Anonymous said...

Definition of MSM: MainStream Media

gt said...

notice the "revised rate of 844,000", down 14k from the reported #'s in march. somehow i think the 98k reported wont be higher, probably a lot lower, pumped up to make the 11% drop (16% in reality) not seem so bad.

Phoenix Sucks said...

I'll bet none of that sales increase is in Phoenix. HAHAHAAH suckers your price is dropping through the floor. 110 degree days no excuse me 115+ hahahahahaha enjoy your weenie roast.

Doktaire said...

What can we do about the woeful state of the MSM, they are NOT journalists, they are just spinning everything in sight. It is obvious that the MSM does not want a housing crash to happen, but it is inevitable, it is like the fable of Canute trying to hold back the tide, it can't be done. Who thinks there will be a bunch of cretinous zombies, reading this, then overextending to buy something, and in the end just adding to the damage caused. Better to just accept the crash, let it run it's course, then start to get sane again. See all the trolls come on and think they are showing us a thing or two, because they believe the MSM headline and won't read more than a sentence or two of the actual article.

Anonymous said...

10% YOY sales number decline is the SMALLEST decline since Feb 2006.

Anonymous said...

That should say Feb 2006 compared to Feb 2005.

Anonymous said...

If everything is ok again then why are the REIC trolls here? Something tells me they have way too much time on their hands.

Sincerely,
A Bitter Renter Who Wears Tin Foil Hats And Drives A Used Honda

Anonymous said...

Anonymous said...
"The previous record decline was a 9.4 percent fall-off in September 1981."

And how did 1982, 1983, 1984, 1985, 1986, 1987 and 1988 do? Prices went sky high if I recall.

Since it's never different this time, 2008-2013 are looking pretty good.

May 24, 2007 5:47 PM
-------------
Followed by a decade of annual price drops & increases in inflation to revert to the mean.

Anonymous said...

Anonymous said...
So let's recap. 2001-2006 price up 100%. 2006 to 2007, pric down 11%. Yep it sure was a dumb idea to buy a home. I'm so jealous of you renters.

May 24, 2007 6:11 PM
----------
NOW is a bad time to buy a home. late 90's was an excellent time to buy a home.

Anonymous said...

what was the % change from 03/06 to 04/06, 03/05 yo 04/05, 03/04 to 04/04? Anyone know?

The 16% change from 03/07 to 04/07 doesn't mean jack without knowing what you're comparing it to.

Frank said...

Nor can you trust the MSM to tell the truth about:

the War in Iraq,
the Bush Administration,
Pelosi, etc

Basically, most of the MSM reporteres decide in advance what story they want to write (based on ideological preferences, economic incentives, or what they think will sell to the editor), and find material to support their storyline.

Anonymous said...

As usual they first revise the prior month number down which then results in a huge increase for the current month. Then they come back later and revise the current month down. We see this every month.

Anonymous said...

Anonymous said...
yeah, the builders have the idea but the private owners are still stuck in 2005. lets see, buy a new place or pay more for a used place......they best lose the denile.

May 24, 2007 5:59 PM
------------------
Private sellers are being undercut by developers. The boast in new sales is coming at their expense because of both bald denial and financial impossibility to suffer such a loss, 10% price cut. Add in the 6% comission, all the costs of preparing/fixing the home, the buyer's closing costs and the fact that prices have been flat the last year then a buyer has to have an 03 or sooner purchase price to just break even. But sellers want/need a profit to put down on a new home, hence now we're back to an 01 price!! If the bought a toxic laon w/ pre-payment penalties . . . GET THE PICTURE!!

keith said...

People (sheeple) who bought a new home a year ago just realized that they're f*cked beyond belief

$500,000 house, 10% haircut, 8% selling fees, they're down $90,000 in 12 months, or $7,500 a month, plus if they took out a no-down interest only they paid $4,000 a month in interest and say another $500 in ownership costs (homeowners etc) or $54,000 for the year. Add back in a tax savings of $13,000 cost of owning past year if they sold now is....

$90,000 depreciation and selling fees (at least)
$41,000 carrying cost
__________

$131,000 one year massive hit or $10,916 a month

Meanwhile you could have rented that same house for $2000 a month (max) or $24,000

Get it now?

You should.

Anonymous said...

Who thinks there will be a bunch of cretinous zombies, reading this, then overextending to buy something, and in the end just adding to the damage caused.

I do. I'll bet there are several discussions around the country going on like this:

Wife: Did you read the news hon, sales of homes are flying at 16%. We better get in on this soon.

Husband: Way ahead of you sugarpie, already went to see Mr. Realtor and he'll have some homes for use to see this weekend. He also agrees that if we don't buy now we'll be priced out forever.

Wife: Super-duper. And to think John and Susan told us we'd be better off renting becase they read it on a blog, I feel so sorry for them that they will be priced out forever.

shtove said...

Doktaire,

Canute didn't try to hold back the tide - he made a show of trying to hold back the tide in order to confound his corrupt counsellors.

So if declining house prices are the tide, and Canute's counsellors are the NAR & MSM, then the Canute of the housing crash must be ... the Fed? George W?

Doktaire said...

When do the used home figures come out, that is of course where the majority of the damage will occur?

Anonymous said...

8% selling costs? on what planet?

Guy Daley said...

I've been reading the troll posts and if you read between the lines they are scared shitless. All the false bravado is so funny.

The real issue is the trolls desperately need to extract more money from there home ATM but they can't. They pray daily that the housing decline will reverse itself slavering over any tidbit the REIC and/or MSM will feed them.

Stop whining on this forum trolls and start selling your toys on Craiglist. Maybe that will tide you over until the housing bubble resumes....you hope.

Anonymous said...

Exactly and if you look at that chart you'll see tha the latest decline is actually the smallest decline in over a year.

Frank said...

What's amusing is that the realtwhore trolls will still insist that there's no crash, that housing is a great investment.

Well, NO. The only people who are safe are the ones who realize a house is a place to live, not a casino chip, and who plan on staying for 10+ years or more.

Oh yeah, and touting an increase in sales over last month means NOTHING. I certainly don't compare the sales in my business by looking that this month vs. last month. I look at April of this YEAR vs. April of last YEAR.

And even if sales somehow did go up (not gonna happen, but just play along here)? They're doubly screwed, because the prices are way DOWN. Add in the 6% that went to the realtwhores and the points and fees that went to the mortgage scammers and the moving expenses and capital gains on the last house, etc etc etc., and they've been TAKEN FOR A RIDE!!!

Anonymous said...

FLASH: Keith is a moron if he thinks a 16% increase in sales means sales are falling.

Anonymous said...

gt said...
notice the "revised rate of 844,000", down 14k from the reported #'s in march. somehow i think the 98k reported wont be higher, probably a lot lower, pumped up to make the 11% drop (16% in reality) not seem so bad.

May 24, 2007 6:55 PM
---------------
I think the revision is for cancelled contracts, i.e. ones that do not go through.

anonymous wimp said...

Keith:

If you can't get your fix from watching Casey Serin go down the tubes, here's a guy who is his financial twin, only with nicer clothes and a fancier hair-do. (Story spotted on the Housing Implode-o-Meter site)

http://www.bakersfield.com/hourly_news/story/148844.html

Anonymous said...

I tell you one thing, my wife is recruiting a receptionist for her company and she's received a gazillion resumes from people involved with real estate in some shape or form: former real estate agents, assistants to Realtors, assistant to flippers, flipper from France who came to the US to flip property and now is seeking to work as a receptionist, small business owners who were catering to the real estate sector, mortgage company secretaries and receptionists, former mortgage loan brokers from NOVASTAR,...you named! There are a ton of them coming from every country and state, applying for that low paying position. If real estate is so great, why all the rats are abandoning ship? The real estate party is over folks, and we can see the evidence through all those hundreds of resumes received in just one week.

Anonymous said...

WITH THE POWER VESTED IN ME, I HEREBY DECLARE MAY 24, 2007 AS THE START OF THE MOTHER OF ALL HOUSING CRASHES!

FINALLY, THE WAIT IS OVER! IT IS HERE IN YOUR OWN NEIGHBOURHOOD! ENJOY THE FIREWORKS! JULY 4 IS EARLY THIS YEAR!

Anonymous said...

For the sheeple who are buying on the way down: SUCKERS!

You guys are geniuses for chasing down when there's no bottom in sight. That will do wonders to your Net Worth!

Anonymous said...

"1) The U.S. stock market is going nowhere but up, because a big chunk of that $400B will wind up there."

Hmmm...I don't agree. A lot of that money is going to Brazil and Japan.
However, Brazil had the balls to increase tariffs on Chinese textiles and shoe imports by 35%, while Bush is selling your job, your retirement, and the future of your kids to the Chinese mafia, as we speak. You know that the ongoing China Trade Delegation meeting at the White House will benefit only cronies, not you. Sorry, middle class!

Another thing, it was just reported that Japan's exports to China are replacing the exports to the US, in an exponential rate.

Anonymous said...

Don't forget that a big chunk of those toxic ARMs will have much higher interest rates towards the end of 2007. Have you seen how the mortgage rates are going up lately?
It will be an interesting Xmas, especially with skyrocketing gas prices.

keith said...

The media hilariously reporting an april vs. march increase as the headline (although year over year was down 10%) and NOT headlining with the MASSIVE price crash is bordering on incompetence.

No, actually, on second thought, it is incompetence. That and the fact that their ad revenue is plummeting with the REIC meltdown.

To give you a comparison here's a couple headlines that would be as stupid:

RETAIL SALE SHOCKINGLY SOAR IN DECEMBER VERSUS NOVEMBER, ANALYSTS STUNNED

or

RETAIL SALES PLUMMET IN JANUARY VERSUS DECEMBER, MUST BE THE WEATHER

Get it now?

Folks, the builders are screwing the existing homedebtors something rotten, and they're going to keep cutting (and keep building) until their profit margin on a new home is 0% (or maybe even lower to gain market share). In other words, they still have a lot of room to cut.

Meanwhile, existing homedebtors who are competiting in the marketplace with the price-slashing buidlers don't stand a chance. The builders will always win.

Oh, yes, this is getting ugly now. Too bad today's deceiving and dishonest headlines (Sales Up!!!) only hide the truth from the sheeple while the builders screw them even harder.

They'll come to their senses in a few months though, when they realize a new home just like theirs is 40% less than what they thought their house was worth (and financed for thank you housing atm)

ugly.

Anonymous said...

Yes prices fell hard, but buyers responded to the price drops too. You can't just dismiss the increase in sales as spin. Isn't the whole idea of sitting on the sidelines to get a good deal?

True. Apparently, a nontrivial portion of the people on the sidelines seem to believe that the current downturn in residential real estate is a normal cyclical downturn and that we are near the bottom. If so, buying now isn't such a bad idea. If, on the other hand, the downturn turns out to be much longer/deeper, then these folks are going to have to wait a long time to recoup even the current discounted prices.

Anonymous said...

Hey FBs, homedebtors, real estate clerks, hamsters, creditwhores, etc, do you have any tangible assets for sale?

We, HPs, are willing to buy your boats, bikes, cars, Rolex, Cartier, Bvlgari, electronics, label handbags (i.e., Coach, Chanel), fancy sunglasses, etc. We pay cash. Make your eBay link available to us and will make you an offer.

keith said...

I am absolutely beside myself that I'm seeing headlines in the MSM tonight that are like

Home Sales Soar by Record Level
home sales surge 16 Percent
Home Sales Soar by Record Amount
New-home sales soar unexpectedly

Folks, your media is corrupt. Seriously, documented, blazenly corrupt. With a sprinkling of incompetence.

Home sales plunged 10% (according to this report) from last year, which was a 15% plunge from the year before that. And price cratered a shocking 10%.

Today's report was historic - the ugliest housing report put out thus far during the crash.

And the MSM spins it as good news.

Now, I have seen everything.

Amazing.

I fear for the Unite States. The media is no longer watching out for you.

You're on your own.

G said...

Yes the media spin is absolutely ludicrous at this point.

The subprime ARM reset time bombs don't even peak (at least in $$ value) until OCTOBER!!!

It takes at least 6 months from when an "owner" defaults until the Forelosure goes up for sale!!

Yeah, right, it's "BOTTOMED".

Anonymous said...

The builders will lead the way down because they cannot stop building or selling. They have huge long-term debts that must be serviced or else they will default on their covenants. J6P doesn't give a damn about defaulting. If he can't sell for a profit, he will just live there free until the sheriff comes knocking. The banks will hold on to their REO's until the FDIC comes knocking.

Doktaire said...

And why do the trolls keep harping on that we'd better buy now or we will be PRICED OUT FOREVER? This can't be true, does that mean kids in high-school, college, the unborn are also going to be priced out forever. The fact is the only real source of demand is people who want to live in a house, period. If they can't buy a house, for whatever reason, house prices go down, Econ 101.

Doktaire said...

FLASH: Money in bank account soars 16% on payday from day before, while is down 10% from a year ago.

Anonymous said...

OK come one everyone. Stop with the macho bullshit. I am a renter, I'm drinking the housing crash kool-aid as much as anyone. But when I saw that number I did think for a second, hmmmm maybe things are turning around. I know it makes no sense, I know the 16% is really a 10% YOY drop, ARMS are resetting still blah blah blah. But still when I see a 16% increase in anything be it MOM YOY, I sit up and take notice.

Despite all the analysis as to why prices SHOULD fall more, many of you forget that people in general are not analytical. They are emotional. They want to buy a house and they will do whatever it takes to get it, damn the evidence of a crash, damn the fact it's cheaper to rent than buy, damn it all. They want to be home "owners" and if they think getting $50K off a $500K home is the deal of the century well fuck it they'll buy. I think a lot of the 16% increase is just that and I don't see why you're all tossing it aside.

gt said...

i guess the weather was not bad, since sales are high, and not good, as prices plunged?

Anonymous said...

MSM says Bush lied in Iraq, Keith and the socialist band of fools says yes of couse he did, MSM would never lie to me.

MSM says Democrats rock, Keith and his socialist band of fools says yes indeed MSM woudl never lie to me.

MSM says capitalism is bad, Keith and his socialist band of fools says yes ideed MSM would never lie to me.

MSM says house sales went way up, Keith and his socialist band of fools say the MSM is lying.

Yeah OK sure thing Qweefmeister.

wingnut said...

"Hmmm...I don't agree. A lot of that money is going to Brazil and Japan."


Brazil? Their markets are too small to absorb even a fraction of the investment capital in the new Chinese fund. The Japanese have strict rules about foreign investments, so again, where else can China go to place these funds?

Figure it out folks, this fund is 10X bigger than the largest U.S. mutual fund, Fidelity, and it's influence is going to distort markets around the world as this pile of cash is put to work. HPers and Keith will be waiting a long time for the big crash because the Chinese don't want it to happen, and they have the money to prop everything up.

Doktaire said...

Even public radio is in on it! I just listened to Marketplace and their headline is that New Home Sales are up, by the largest amount in 14 years. What a travesty of objective reporting! I wrote to complain.

Out at the peak said...

Drudge Report uses the headline "Fire Sale"

jymkata said...

Anonymous said...
8% selling costs? on what planet?

May 24, 2007 7:31 PM

___________________________________

I sold my house in December and paid 7.5% in fees.

6% was for the realtor
1.5% was for misc. fees

Anonymous said...

The existing home sale stats come out tomorrow. Look for the same spin.

keith said...

I can't believe there are realtor trolls here trumpeting a sales volume increase versus last month while prices are crashing

Does Joe Homeowner care if more homes are selling, or if the value of his home has just tanked and he's facing sure financial armageddon?

Folks, I think it's time to admit it, there are some people out there so dumb that even a cold slap from reality can't wake them up

How they tie their shoes and brush their teeth in the morning is beyond me

This housing crash is going to be unavoidable though, no matter how much the MSM mis-reports and how much realtor and homedebtor trolls spin

Supply. Demand. Prices. Questions?

keith said...

I think Drudge was the only media outlet I've seen so far that got the headline right.

If I edited the New York Times, tomorrow's headline would be

Home Prices in Freefall During Desperate Homebuilder Fire-Sale - Neighborhood Comps Destroyed

marinite2 said...

two sided coin, record sales jump , record price drop....bears will ignore one side, bulls will ignore the other...let the arguing begin

Wrong. The only way to lock-in lower prices is for houses to sell. Anything less is just a "paper reduction". The increase in sales in combination with lower prices is very good news indeed for the bears aka "bubbleheads".

Deal with it.

Anonymous said...

I sold my house in December and paid 7.5% in fees.

6% was for the realtor
1.5% was for misc. fees

May 24, 2007 10:14 PM


Man you are a sucker. 6% for a realtor...yikes, last I did that was...oh wait never. Dude you do know that is negotiable right? 4% is as high as anyone should be paying. if your realtor says no, there are about 1000 others who will say OK.

winthorpe said...

So how do the FB's of 2005-2006 feel when they find out that their neighbors bought the same model home in the same neighborhood for $450K instsead of $500K and got $50K in free upgrades on top of the discount? Next year, those homes will be $400K with free upgrades. This is wonderful

Anonymous said...

This is what my life is like now;

1. Get home from work, check investments, see headline "market falls on surging home sale data"

2. Think "huh?"

3. Then I have to come over to HP and proceed down the blog list menu in order to get the real story of what is really going on.

Pick up a paper, watch the news, why bother???

Anonymous said...

You know, the way the MSM churned this one out is amazing. Comparing these numbers to previous month is a joke. YOY is what really shows the trend in the market.

So what will that CNBC crowd say? Well, we might have hit bottom and things are turning around. Of course they have been saying this several months now.

I find that someone who touts 16 percent increase over last month but 10% decline from last year ridiculous. This is with a 11% decline in prices just over last month. What is the YOY price decline? It's gotta be getting pretty large now.

Anyone who doubts the downward slope in this housing market obviously has a vested interest in real estate.

x-NoVA said...

The CNN money article was pretty accurate. Prices plunge/sales surge.

If youre a recent homebuyer how could any of this be considered good news???? prices dropped! Everyone that just bought has now lost equity/money. Who cares if your new neighbor got a better deal. Id be pisssed

Anonymous said...

Fox news today touted increases in new home sales ... but showed pictures of signs in front of used homes in the report (This only confuses the issue, the report and the pictures are mismatched)

Lost Cause said...

It's called a fire sale. It comes after a disaster. Dumping inventory. It is only temporary.

joseph corrao said...

When the homebuilders figure out that only falling home prices will move their inventory, prices will be further reduced. With falling land prices and raw materials costs, the builders have room to cut prices in the coming years. Do the FBs, flippers and lenders have that luxury?

Joe Logic said...

The builders are definitely in panic firesale mode. Any homedebtor who is gullible enough to eat up this MSM spin might as well believe in Santa Claus. You hamsters are competing against desperate builders doing a walmart closeout with their inventory, and those bargain bin prices don't include incentives. Shit for what I can get from a builder you might as well let me bang your wife when I come to your open house. This has especially gotta hurt in busted loser cities like Vegas and Phoenix, where builders are still churning out shitboxes the fastest. All you hamster FBs have years to go... no time to troll, get back on that wheel and haul ass!

Doktaire said...

The thing is builders can afford to discount prices in a way individual homedebtors never could. My guess would be that there is some kind of "fire sale" on new homes going on, getting as much cash back in the bank before the market really tumbles. I am betting the existing home sales will be bloody awful! An individual cannot go lower than what they owe, period. This is going to be interesting.....

Anonymous said...

The Chinese money is not NEW money.

And it's not larger than fidelity which has over a trillion in money managed.

First, the Chinese own BONDS. They have to SELL those BONDS to get the cash to buy stocks. It's not like the money is sitting in dollar bills not earnings interest.

So it's a wash.

Anonymous said...

And Bill Gross said it's now UNLIKELY the FED cuts interest rates.

Not exactly "interest rates will go down" as you interpreted it.

Shakster said...

The "Plausible Deniability"Crowd at the crock -o sh!t CBS said the numbers came out much stronger than expected.Spin away scumbags,this isn't simple theft or cheating we're talking about,it's the very heartbeat of America,and we are in serious trouble.This is now a horror for many,so you better hope that Mexican scheme works out to save your sorry shill asses.ASSClowns.
BTW the Pain is here now so time to come up with the solutions for FBs.HPers are the only ones I know who take that to heart,and sincerely offer help.We might smack a few FBs,but sometimes we must. As for the dicks at CBS,your day is a comin,you traiterous phuks.DIE......SOOON!

Anonymous said...

Anonymous Morons
Have you learned that 100%of the time that the "official numbers are cooked?DUH-only been two years of evidence.They even admit to a margin of error of +or-10%.Not that we want to see sales crash that hard,but damn me to hell if you ever get a grasp on reality.

Shakster said...

Btw -Desert Star,a master planned hood in California went belly up a few weeks ago,and removed their sales office.Before they left they had removed half of orange street,left the infrastructure half finished,bear lots ,curbs,and a sh@Tload of dust.The ugly fly attracting flags will remain until the desert heat ,and wind shread them to tatters.UH ,But sales are up a record 16%.Everyone I know can't sell their effing home ,but the official Puds have managed to brew up 16% sales of homes.Whos homes were these?Any real people involved?were they dog houses?
Did they mention where the hell this 16% occurred?I see a whole lot of people who could use some of that 16% about now,but when you divide 16% of shit among REal live FBs,you end up with a realistic sales decline.If this is a record up move,Fuck Man whats the decline gonna feel like?That 16% needs to show up reality somewhere,I'm sure the peices of traiterous crap in the media aren't liars.Fukkin PLEEEEEEEAAAZZZZ.

Anonymous said...

Big drop in home prices predicted
http://money.cnn.com/2007/05/23/real_estate/prediction_big_home_price_drop/index.htm?postversion=2007052413

Some economists see steeper drop in store for home prices.
By Les Christie, CNNMoney.com staff writer
May 24 2007: 1:37 PM EDT


NEW YORK (CNNMoney.com) -- Most industry watchers agree that home prices will continue to slide before they recover, but now some economists say they've got a long way to fall before bouncing back.

David Wyss, chief economist at Standard & Poors, has forecast a price drop of about 8 percent for the 24-month period through the fourth quarter of 2008.

His prediction came during a general economic outlook session at the Mortgage Bankers Association's (MBA) National Secondary Market Conference & Expo in New York this week.

Housing prices will suffer from a "significant increase in defaults and foreclosures," he said, with affordability still a major issue. Wyss worried how hard the slump will hit already highly inflated housing markets.

He said its impact on areas like South Florida, where much of the buying is speculative investment in second homes, could be big. "You don't need a second home," Wyss said.

Overall, he said he expects the U.S. economy to slow this year to a growth rate of about 2.25 percent, down from 3.3 percent last year.

Celia Chen, Moody's Economy.com's director of housing economics followed Wyss' lead. "We also have an 8 percent decline in median house prices [for the 24-month period ending March 31, 2008], which is consistent with what David Wyss had."

"That is quite a bold forecast," Lawrence Yun, economist at the National Association of Realtors, speaking from his Washington, D.C. office, said of Wyss's prediction. NAR is predicting a much less severe total decline of 1.4 percent through the slump - prices have already declined three straight quarters - and that a recovery will start to take place in early 2008.

"The run up," Yun said, "was an investor-demand driven boom, and it was followed by an investor-driven collapse."

more...

Anonymous said...

So let's recap. 2001-2006 price up 100%. 2006 to 2007, pric down 11%. Yep it sure was a dumb idea to buy a home. I'm so jealous of you renters

five years of -11% = 44.2% drop
(1.00 - 0.11) ^ 5

so at this rate, a house bought in 2001 for 200k, valued at 400k in 2006 (100% increase) will be worth 223k (after 44.2% drop) in 2011

Anonymous said...

I don't understand why you people are whining about the Mainstream Media (MSM). They are what they are, a predictable commodity. If they don't report the truth that gives you an advantage (if you are an investor). The advantage is, you know what's really going on while the dupes who listen to the press are clueless.

I see no downside here. If you're so smart and everyone else is so stupid, why aren't you rich? Why are you wasting time on this board?

Paris2LA said...

By day's end, Wall Street didn't buy the spin either. I think as people read the details the spin falls apart. Even if new home inventories fall, the incredible foreclosure rate will grow resale inventory faster than ever in the next two years. Also, mortgage rates are up quite a bit lately and, as someone pointed out, the tsunami of resets hasn't peaked yet. I think it may not peak until this fall or next year. People like me sold in the past couple of years and have been on the sidelines with pent up demand. I've watched condos in my area come on the market this month in a range where they could actually cash flow with a 30 year fixed loan again for the first time since 2002 or 2003. It is somewhat tempting to jump back in and if I were married, I would probably HAVE to jump back in. However, the numbers indicate prices will be falling for at least two more years so I won't jump in yet. However, the number of sales may well pick up for several months during the next year as prices fall further due to the unprecedented numbers of foreclosures and excess inventory in the market. Lots of people will jump in when they spot 10-20% price declines. It happens with stock market bubbles too. It's just part of the pattern.

Anonymous said...

I don't want the economy to crash. I just want to upgrade to a better house and not have it lose value in the upcoming years. Therefore, my strategy is to wait for the bottom in prices before buying. I don't give a rats ass about "the housing market" being up or down. Sales being good or bad. I just care about prices and mortgage rates. Both should be as low as possible before I buy.

An additional pleasure would be to be there when the sheriff boots the stupid squatter out of the house when I foreclose. That sucker will have kept me from upgrading my house by being party to driving up the prices to stupid levels.

RJ said...

I agree that there is a tremendous amount of liquidity that can still be pumped into the system to attempt to support asset prices of all sorts, from equity markets to real estate. But central banks can only create liquidity, they can't force consumers to use it. BOJ dropped real interest rates to zero and created so much Yen that the carry trade became a major source of speculative investment capital. Yet Japan remained mired in a deflation from which they are barely recovering. Look at the NIKKEI 225. It spent 13 years crashing and in real inflation adjusted terms has barely moved from its 2003 bottom.
The U.S. consumer is way overextended and FED policies may have little or no effect on anything but Wall Street. The FED will be pushing the proverbial string.
I wouldn't depend too much on China to keep the U.S. afloat. Strategically, China is becoming a major competitor with the U.S. for critical global energy resources. Using their massive surplus of dollars, China is buying up oil anywhere a U.S. military base isn't sitting on it which is making Washington very unhappy. Yes, Snow and company may work out something with the Chinese to keep dollars recycling into U.S. markets, but that is not a long term fix. The key is convincing the Chinese to continue buying more Treasuries than they know what to do with. The key to that is convincing the Chinese that holding devaluing Treasuries is compensated for by U.S. consumption. Therein lies the rub. If consumption continues to slow - and all the indicators show that it is - China may abandon the game. I don't believe it will happen overnight. But the DOW at 30,000 and houses appreciating 100% in another 5 five years? Only at the cost of very high inflation rates and a serious drop in the U.S. standard of living.

bozonian said...

I predict tomorrows Existing Home Sales will be the complement of today's New Home Sales, that is, sales will be down (instead of up) and prices will only be slightly down.

This is because home owners are loath to lower prices. Home Builders don't have the emotional baggage attached to a home. They have to move product. Home Owners are holding out or just putting off plans if those plans require the house be sold. So sales will be down because buyers are buying the New Homes now leaving the Existing Homes to languish, make them plummet later this year, perhaps in a few months.

I could be wrong but it's fun to try and predict.

All of what is happening is exactly what we have been predicting and the the exact reasons we laid out here on this blog. It's just happening in slow motion compared to how fast we thought it would happen.

Anonymous said...

New home sales up 16.2%! Biggest INCREASE in 14 years. So much for you housing crash. Looks like the spring selling season just rebounded in a big way. When will you suckers admit you were wrong?

Hehe...

Those of use that have stacks of cash from bailing at the peak, absolutely DEPEND on the highly reliable stupidity of people like this.

Dangle any bright shiney object in front of their eyes and they're instantly mesmerized and distracted from the real numbers behind the story. Connecting the dots is completely out of the realm of any part of their thinking.

Thank GOD for that!

Patience is the key as they will ultimately blindly trip all over themselves, leaving all sorts of their own cash on the table for the easy taking.

One thing has not changed for generations; As P.T. Barnum once said, a fool and his money is easily parted.

So, I say let them feed on the cool-aid in mass quanitities, because their money will be MINE in no time at all.

raynla said...

Anonymous said...

Der... fine I won't trust the mainstream media but what does MSM stand for?


lol...

You still haven't addressed the anonymous posting issue!

But it's ok, the Main Stream Media never address the main issues either.

RayNLA

Anonymous said...

What does LOL stand for as everytime I look for that word? i get lolita porn???

Anonymous said...

You know maybe we can't entirely blame the MSM here, the whole liberal media diatribe injects a sort of "give em what they want" approach to the news.

Obviously more complicated then that, editors are a cowardly corporate hacks nowadays. Newpaper magagement is attending cocktail parties with Carl Rove.

Anonymous said...

108 posts on this topic...now that is a sign of panic, among the renting crowd.

Keep spinning away losers. Oh no 16% up is really a 10% down. I live in a shithole apartment instead of a beautful house, but I'm so much better off. I drive a 20 year old Honda instead of a new BMW but I'm so much happier. I don't follow the "mainstream" media, I only follow the rantings of crackpots online and I'm so much smarter.

Yeah sure thing.

Anonymous said...

Anonymous said...
108 posts on this topic...now that is a sign of panic, among the renting crowd.

Keep spinning away losers. Oh no 16% up is really a 10% down. I live in a shithole apartment instead of a beautful house, but I'm so much better off. I drive a 20 year old Honda instead of a new BMW but I'm so much happier. I don't follow the "mainstream" media, I only follow the rantings of crackpots online and I'm so much smarter.

Yeah sure thing.

May 25, 2007 10:52 AM
-----------------
The pathetic trolls just will never admit it until they are the one's out on the street and they will say "I never saw it coming"

New home sales are up MoM 16% but down YoY 10% and price is down 11% but I did not catch if this # was YoY or MoM.

New home sales are the canary in the mine harbinger. Resales must compete or sit & rot until developers work through all their excess inventory. Many sellers cannot wait that long and will do what must be done to compete for buyers or refuse and go into foreclosure instead which creates the same result, a price competitive resale.

garyk said...

Report from the street (my 'street'):

Local aquaintences that have been involved in the Real Estate industry are mostly now either:
-out of work and looking for a job
-lucky to have kept their job but proactively looking for another job

This is in a "non-bubble" area. I really think the fast food joints around here could use some help from these clerks. Unfortunately, they'll have to adjust to earning what they're really worth.

wingnut said...

"And Bill Gross said it's now UNLIKELY the FED cuts interest rates.

Not exactly "interest rates will go down" as you interpreted it."


The Fed doesn't control mortgage interest rates. They are largely a supply and demand situation and since 2001, the Bank of Japan has been pumping the "supply" by way of the carry trade. Now China's central bank is about to enter the picture with $350B to lend (on top of the $400B investment fund). With that much money entering the system, do you honestly think rates are going to rise?

Figure it out and stop believing the doomsday crowd. There WILL be a reckoning some day, but it may be 5, 10, or even 20 years from now.

Ranma Tendo said...

Sales of new homes rose so dramatically BECAUSE home sales in March were so low. If March sales hadn't been horrible, decent April sales wouldn't have been such a contrast. April 2007 sales are still lower than April 2006 sales, most articles just don't mention that.

April home sales are up from March because it's spring and because some sellers are finally dropping their prices. Even with dropping prices, fewer houses are selling than did last year in the same month.

Anonymous said...

The funny thing is that FB's have no money to invest in the stock market because all of it is tied into that overpriced boat anchor home which is depreciating in value. LMAO

Doktaire said...

QUOTE "The thing is builders can afford to discount prices in a way individual homedebtors never could. My guess would be that there is some kind of "fire sale" on new homes going on, getting as much cash back in the bank before the market really tumbles. I am betting the existing home sales will be bloody awful! An individual cannot go lower than what they owe, period. This is going to be interesting....."

This is what I said yesterday, and today we hear that existing homes sales suffered there biggest drop in FOUR years, how are all you trolls feeling today, bit stupid? Well, that would be the same way you feel every day, I suppose.

Doktaire said...

QUOTE: "Keep spinning away losers. Oh no 16% up is really a 10% down. I live in a shithole apartment instead of a beautful house, but I'm so much better off. I drive a 20 year old Honda instead of a new BMW but I'm so much happier. I don't follow the "mainstream" media, I only follow the rantings of crackpots online and I'm so much smarter."

Everything you say here is true, so if you were meaning to troll, a word of advice, "Sarcasm doesn't work in text".

Anonymous said...

I love the people who are oblivious to the facts see this blip on the bubble, and think the next month is even going to be better! Like watching a ship sink then watch in it's death throws jut out of the water before it goes to it's watery grave in the deep dark depths of the ocean. All the while these morons on the rail pointing and saying "LOOK IT IS COMING BACK UP!!!", then as it slides into the depths they say...."oh".

Yeah this means that all the economists and all the data are wrong, the inventories **poof** gone, all the foreclosures **poof** gone, all the subprime and alt-a messes **poof** gone. I guess you guys are firmly planted in the land of logic and reason, and definitely not being unrealistic and stupid....no not at all.

Anonymous said...

Just sold a house in salt lake city for a 80% profit in 1 1/2 years. The market is still selling in Utah. I think its the best market in the USA. no gloom and doom.

Anonymous said...

Nah nah nah
nah nah nah
heyyy heyyy heeyyy
goood byee

Buh bye Keith. You are becoming irrelevant. There was no bubble, there is no bubble. There was no crash thee is no crash.

Housing is booming again. Dow is setting records every day. Only thing that's crashing is your readership.

Anonymous said...

New home sales are the canary in the mine harbinger.

New building permits are a more forward leading indicator.

Off a cliff...

Anonymous said...

"I sold my house in December and paid 7.5% in fees.

6% was for the realtor
1.5% was for misc. fees"

Did you even try to negotiate the 6%? I did when I sold and got the agents to split 4%

Anonymous said...

80% profit my arse!

Anonymous said...

DOW is up and homedebtors are down. Stupid debt laden fools think they are rich. HAHAHA

Benjamin Franklin said...

Someone said:

Apparently, a nontrivial portion of the people on the sidelines seem to believe that the current downturn in residential real estate is a normal cyclical downturn and that we are near the bottom. If so, buying now isn't such a bad idea.

If, on the other hand, the downturn turns out to be much longer/deeper, then these folks are going to have to wait a long time to recoup even the current discounted prices.


Well, the thing to realize here is that housing prices ARE cyclical, and DOES follow trends. Anyone who's unfamiliar with the periodicity (AKA cyclical nature) of a sine wave is urged to examine one!

A review of a graph of Schiller housing prices (Which covers 150-odd years) shows that what goes up ALWAYS comes down: revision to the mean is a beatch! Take all the "noise" and variability out of the graph, and you'll see that home prices appreciate only 0/4%, ON AVERAGE.

Of course, the problem is many people's only experience with paying attention to home prices has occurred in recent years: so their whole experience is filled with home prices going UP, not DOWN.

Shame: maybe if they'd taken an Economics 101 course, they'd have even a modicum of knowledge about market behavior as it pertains to "bubbles" (AKA boom/bust cycles).

Anonymous said...

"Brazil? Their markets are too small to absorb even a fraction of the investment capital in the new Chinese fund."

Brazil is the 8th largest economy in the world. The GDP of the state of Sao Paulo alone is greater than the entire GDP of Argentina. The Chinese (and South Koreans) is all over Brazil, sending trade delegations, opening trade offices, building factories, building strong commercial relationships, etc. Meanwhile, the US is distracted with expensive phony wars.

Another thing, Brazil has commenced the project of 4 more nuclear power plants, which indicate future needs of clean energy for rapid economic expansion. They already have 2 plants (Angra I and Angra II) that are about 30 years old, never had a problem, and totally built with total Brazilian technology.

Let's see: the 8th economy in the world, fifth largest country in size, population of 200 million, biggest biodiversity areas in the planet that attract investments from Chinese biotech companies, successful mfr and one of the main suppliers of aircrafts (Embraer), largest exporter of commodities (soy, coffee, sugar, orange juice, ethanol, metals from company Vale do Rio Doce), world's largest exporter of poultry, satellite launch provider, currently number 1 market for Ferraris in the world, second largest in private jets (only behind the US), third largest in helicopters (only behind the US and Japan), auto sufficient in oil (Petrobras), one of the main manufacturers and exporters of automobiles (VW, Mercedes, Audi, Toyota, Mitsubishi, Nissan, Ford, Citroen, etc), largest mfr and exporter of footwear, world's largest iron ore producer, there are 93 million cell users (and growing) which makes Brazil the 6th in the world. BTW, all the Motorola cell phones sold in the US are made in Brazil. The list is too long.

The Brazilian economy and market is huge with less than one fifth of the country's potential farmlands being cultivated. While the US gets distracted with stupid stuff (like the phony war on terror thing), China has been building important economic and strategic alliances all over South America.

China wants to diversify away from that huge amount of worthless American treasuries. Investing more money back into the US wouldn't create a very good hedge.

Finally, here are the top 10 export markets for Brazil in 2005. China is climbing fast and furious, already in third place:

1. United States (18.9% of total exports)
2. Argentina (8.4%)
3. China (5.7%)
4. Netherlands (4.5%)
5. Germany (4.2%)
6. Mexico (3.5%)
7. Chile (3.1%)
8. Japan (3.0%)
9. Italy (2.7%)
10. Russia (2.5%)

Anonymous said...

MAYBE IF THE BUILDERS START GIVING NEW HOMES AWAY FOR "FREE", THEY CAN CONTINUE TO BOOST SALES NUMBERS TO THE MOON IN THE COMING MONTHS!

WHAT A FARCE!

Kurt said...

Hey, for those trying to catch a falling star, remember the number 17. That is the number of years it took Japan for its RE market to reach historical P/E norms.

17 YEARS!

At best we are in year two, and right now we are in a massive and cruel bull trap. Anons wanting to have the sheriff boot some poor suckers out who got caught with a toxic loan cuz you are entitled to upgrade your house and they were in the way!?

Just remember, those thugs in a uniform know where you live too!

King of the Bitter Renters

Kurt said...

Hey, for those trying to catch a falling star, remember the number 17. That is the number of years it took Japan for its RE market to reach historical P/E norms.

17 YEARS!

At best we are in year two, and right now we are in a massive and cruel bull trap. Anons wanting to have the sheriff boot some poor suckers out who got caught with a toxic loan cuz you are entitled to upgrade your house and they were in the way!?

Just remember, those thugs in a uniform know where you live too!

King of the Bitter Renters

bankguy said...

If I had an investment fund, Brazil is one of the last countries I'd consider. Brazillian courts have a piss-poor record for upholding contract and property rights for foreign investors, and their government bureaucracy is about as corrupt as any you'll find in South America. Hong Kong, Singapore, Australia, the U.S., Canada, and English-speaking EU countries all are much better places to put capital to work.

anagama said...

Keep spinning away losers. Oh no 16% up is really a 10% down. I live in a shithole apartment instead of a beautful house, but I'm so much better off. I drive a 20 year old Honda instead of a new BMW but I'm so much happier.
-----
I live in a nice 2 bed appartment on the lake on a 25 acre parcel that's mostly woods and lawn -- deer, rabits, beavers, the occaisional osprey. It feels like being in the country but I'm actually right in town. It's nice. Houses in the same area with waterfront (my window is 30' from the water) are 0.5 to 1m and stacked atop each other like sardines. For real open space like I have, the homeowners have to go to a park. I pay $780 per month.

My car is an older jetta. About 4 years ago, before it was paid off, I thought about upgrading. Then the title came in the mail and the next month I had no payment to make. That was the first moment I truly loved that car. The last thing I want now is a BMW car payment. All my paid off car takes is insurance, oil, and gas. I love it.

And as for the gas, every month I'm making 5 times my energy usage (and this is at unleaded for $3.60/gal) with my canroys (Canadian Royalty Trusts -- oil/nat. gas). I suppose I could have used that money as a downpayment on a crappy house in a lousy neighborhood, but my canroys are paying about 12-14% in dividends, with payments made monthly. With a weakening dollar, they're going to get sweeter.

PLUS, the 15% tax the Canadian govt takes off the dividends, I can deduct dollar for dollar from my US tax liability (this isn't the game of reducing taxable income, if I owed $10 and paid $2 to Canada, I'd pay the US $8). Considering what a boondogle Bush has caused, I feel much better paying taxes to Canada than to my own country.

Anyway, I have a nice place, an OK and well-running car, investments that pay me a nice dividend, and no debt (except for my student loans). I'm totally happy not having my nestegg tied up in real estate.

RJ said...

Bankguy said:
"If I had an investment fund, Brazil is one of the last countries I'd consider..."

It doesn't matter what you or I would consider. What is China going to do with it's trade surplus? As of now it looks like they're on a global raw materials and resource shopping spree that is giving them plenty of incentive to invest in developing countries on a massive scale. China is investing in places like Sudan because of the oil in the Darfur region. See http://www.financialsense.com/editorials/engdahl/2007/0521.html.
Nope. Don't depend on China to support the DOW or the housing market.
BTW. The DOW is way down if you measure it in commodities such as oil, gold, silver, or industrial metals. It is also down in Euros or Pounds. In Real dollars it will have to hit 14,000 just to return to its Y2K high.
Housing is on its way down as well. Its just a matter of time. Stay in cash.