The good and bad in the latest housing report

Posted by: Prashant Gopal on August 25, 2008

First the good news.
Home sales in July jumped by 3.1%, the highest level in five months, the inventory of unsold single-family homes declined slightly, and home prices in the Midwest climbed 1% compared to a year ago.
But the National Association of Realtors July report released Monday also has plenty in it to worry about.
Single-family home prices fell 7.7% compared to a year ago when the credit crunch was just beginning. In the west, prices fell 22% compared to a year ago, though sales during the same period were up 0.9% on a seasonally adjusted basis (Sales are increasing because first-time home buyers and investors have been jumping on foreclosures and other bargains).

We’re a long way from recovery, I’m afraid. Interest rates are creeping up and the foreclosure crisis isn’t letting up in California, Florida, Nevada, and Arizona. And even in the relatively strong Northeast market, Connecticut, Massachusetts, abd Rhode Island are in tough shape and could weaken further when homeowners get their winter energy bills.

It could be a while before we see a really positive home-sale report.

Reader Comments

Cole

August 25, 2008 2:05 PM

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recovery???

August 25, 2008 7:09 PM

recovery??? 2020

recovery

August 25, 2008 7:09 PM

recovery??? 2020

smi2le

August 25, 2008 10:38 PM

Real estate prices in general and housing prices particularly will soon return to 1997, when the bubble began to inflate, and will stay there for a long time.

Snoz

August 26, 2008 2:02 AM

The California real estate bust is a prelude of what awaits California in the 21st century. During 2001 through 2006, the godless and evil Californians have shown their boundless measures of avarice, dishonesty, and immorality during the real estate feeding frenzy. In the evil land of California, men of expedient motives coupled with shameless real estate promoters swindled banks, security-holders, and the innocent homeowners. The subsequent catastrophic harm to the national economy is self evident. With $16 billion in state debt and operating without an approved budget, California is now cursed by the new plague caused by its own evil doing. But California was not always so. In an earlier time, California was a home of hard-working decent people whose spirit and labor lifted them from poverty. Examples: new movie industries like Hollywood, DC-3 production, innovative agri-business, and Aerospace industries brought prosperity. However, surreptitiously, like a stealthy thief in the night, things began to change for the worse. The hard-work work ethic, once cast in stone, was shattered and replaced with the get-rich-quick mentality in real estate speculation. After about 30 years of preaching by the real estate Priests and their disciples who promised the pleasure of faith in real estate and the salvation of real estate profit, the virtuous Californians who once inhabited the semi desert became the current generation of evil Californians who worshipped the Real Estate Religion. In the new Promised Land, the Real Estate Religion had one simple message: There is no other god other than real estate investing; believe and thou shall be saved. The allure of riches, the promise of heaven on earth, and the sensual pleasure of money from faith in real estate investing were the powerful enticement of the Real Estate Religion. As the once atheist Californian worshiped his new god, it came to pass that the Evangelicals spread their faith eastward to the city of money handlers whose greed, avarice, and shamelessness were exceeded only by the evil-godless Californian. At the height of the 2004 real estate feeding frenzy, the real estate Priests and Evangelicals published ever rosy reports of the ascension of real estate prices and profits. In awe of the mighty real estate spirit revealed before them, the disciples began to speak in tongues to the masses about how the saving grace of real estate investing is available to all with no money down, all you need is faith. Deliverance of the masses was at hand. However, there was but one little muster seed in the way. In order for the Real Estate Religion to give deliverance, the Priests and Evangelicals had to recruit the Charlatans who would do the dirty paper work: fraudulent loans, no-income mortgages, fraudulent property appraisals, misrepresentation by real estate agents-brokers, etc, etc. By early 2006, the California real estate scam had collapsed upon their victims and disciples. In the hope of resurrecting the Real Estate Religion, the remnant supporters of the real estate scam, who repent not and confess not, will faithfully manipulate sales data to encourage the flock to keep the faith. Emerging out of the ruin are California Faith healers who promise to heal those afflicted with foreclosure by instructing the naïve to invest in foreclosure property. Pretending to save one unfortunate foreclosure homeowner while simultaneous betraying the new buyer, the California Faith healer makes Judas green with envy. While it is written that the wages of sin shall be death, and those who worship false god shall be cast into fire, verily, there are worse punishment for him who is the prophet of the false Real Estate Religion.

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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