Existing home sales declined last February, and in the two preceding months, but the news continues to be good. Recent weakness is best seen as "payback" for the burst of sales leading up to November, when people were rushing to take advantage of a government tax credit thought to be expiring. The average number of sales over the past year is still well above the lows of early last year, and the lows of early 2008. Considering that housing prices likely bottomed about a year ago, and that lumber prices have almost doubled in the past year, the evidence that the housing market has stabilized (and is probably turning up, albeit slowly) continues to accumulate.
If you read daily some excellent real estate blogs, such a LA Curbed, you do get a feeling that the market has bottomed, and that the dealsters are out buying properties for good prices. The general public may be chary for quite some time.
ReplyDeleteIndeed, it sometimes seems investors of any stripe right now need a suit of armor and a cast-iron stomach.
Our financial system collaped in 2008, and real estate markets got cut in half. The Dow is still below the Clinton years. We don't know if there is another Long-Term Capital Management out there somewhere--a financial hunter-killer submarine.
There is the uncertainty of Obama. Obama, such talented communicator on some levels, has yet to express admiration for the talents of people working in the private serctor. Even trips to factory lines, to Silicon Valley, or the floor of the NYSE would help, to show he views business a basically good guys, and not adversaries. And, of course, any administration has to be pro-business.
On another topic: Can anyone explain why shareholders should not have greater ability to put candidates up for boards of publicly held companies?
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ReplyDeleteThe median existing home price is $165.000 - still $20.000 too much ! Don´t forget stimulus like HAMP, $8k first buyer, millions of foreclosures.
ReplyDeleteHistorically, home prices have risen annually in line with CPI !
Scott,
ReplyDeleteAll I know is the foreclosure market is still hot, at least in Az.
Ed: Actually, there is a case to be made for home prices to increase a bit more than the rate of inflation over time. Every time I've looked at a chart of home prices it seems to me there is a tendency for prices to increase about 1% per year more than inflation. That makes sense, because incomes tend to increase faster than inflation also.
ReplyDeleteIt is interesting you use the 1%
ReplyDeletefigure.....looking at new home prices since 1963 they have appreciated
over the last 47 years at a rate of
1.3% annual rate over the inflation rate.....
Benjamin,
ReplyDeleteI agree with much of what you have to say about the excesses of the Federal Government. But I do not understand your lack of objectivity. You are so quick to blame Republicans it appears, for every infraction, and for the most part you are correct. Republicans have blown their opportunity to be conservative by allowing the RINO's leadership.
But what about Democrats? They have moved so far left JFK would be to the right of George Bush today!
You said: "There is the uncertainty of Obama. Obama, such talented communicator on some levels, has yet to express admiration for the talents of people working in the private serctor. Even trips to factory lines, to Silicon Valley, or the floor of the NYSE would help, to show he views business a basically good guys, and not adversaries. And, of course, any administration has to be pro-business."
You imply that his ideology is centrist when it is clearly not. The truth is that our President is a socialist and has little concern let alone respect for capitalist concerns. So I wouldn't expect him to visit businesses. Besides that he is an elitist and elitists don't like to sully their hands by associating with the unwashed masses.
You may be correct in your disgust with Federal Government, but Federal Government is overwhelmingly Democratic.
Bob