Who's Going to Buy a New House with a Looming Depression - NO-ONE!

[propertymanager]

http://finance.yahoo.com/news/New-home-sales-hit-record-low-apf-2245141272.html?x=0&.v=1

The Commerce Department reported Wednesday that new home sales dropped 11.2 percent last month to a seasonally adjusted annual sales pace of 309,000 units, the lowest level on records going back nearly a half century. The big drop was a surprise to economists who had expected sales would rise about 5 percent over December's pace

Combine that with the government housing stimulus ending; huge numbers of REOs being held by banks; foreclosures about to EXPLODE; unemployment INCREASING; and massive government spending - and I predict that housing prices are ready to DROP LIKE A STONE!  These next couple of years will be quite exciting!

You'll note that the experts were expecting a 5 percent increase - they were only off 16 %!!!  These are the same idiots that are saying the recession is over!   Wake up - we're headed for the mother of all economic collapses!

[fdjake]

Who's surprised by this????????

New Home builders have basically PACKED IT IN....I can not tell you of ONE new housing developement currently underway in my area...So what's the SURPRISE???

Previously owned homes sales are UP BIG here....HUGE!!

I put a house on CRAIGLIST this weekend that I just closed on Friday...

28 emails so far 5 offers OVER asking.....3 of THEM ALL CASH!!!

INVESTORS are BUYING!!!

If that's who's BUYING......THAT'S WHO I'M SELLING TO!!!!

Closing up shop and burying your head in the sand is a HUGE MISTAKE here.....I've made more money so far this year than in ANY other year........E V E R!!!!

If that's a DEPRESSION?????

I'm IN..........ALL IN!!!!!!!!!!!!!!!!!!!!!!!!!

[propertymanager]

Previously owned homes sales are UP BIG here....HUGE!!

They might be up where you are, but you are the exception to the rule.  Existing home sales plummetted 16.7% in December, which (like the new home sales) was the largest drop ever recorded (all the way back to 1968)!  Here's the article:

http://www.marketwatch.com/story/existing-home-sales-plummet-167-in-december-2010-01-25-10100

The recovery is dying and the deals will keep getting BETTER (i.e. lower home prices).  FDJake has the right idea - quick in and quick out.  I wouldn't be buying ANYTHING with the hope of long term appreciation!  Get your money NOW, either in rental cash flow or quick flipping profits.

BTW, in case no-one has noticed - inflation is alive and well - far above the numbers being published (manipulated) by the government?  Been shopping lately? 

[fdjake]

Mike....You could end up being 100% right on your call.

Believe it or not.....What worries ME more than anything right now is CHINA....they have a RAGING real estate BUBBLE there....WHEN, not IF it busts.....WATCH OUT BELOW!!!!!

[propertymanager]

Yes, China is a concern, but what about Europe?  Europe is one step ahead of us in terms of being socialistic and in terms of unsustainable debt.  When Europe collapses (soon), how will that affect the USA?  Will the collapse simply cascade around the world?  Will European money temporarily flee to US Treasuries, buying us a little more time? 

Rioters are clashing with police in Greece today!  That's what happens when the government can no longer provide freebies to all the lazy masses!  What's going to happen here when Americans wake up to the fact that their retirement is gone; their Section 8 is gone; their foodstamps are gone; their Medicare/Medicaid is gone; and their social security is gone????  I predict the breakdown of society - the mother of all riots!

[rookieNYC]

Once again our  friend Mike gives half the story..As usual  ..A little article that was in *todays* wall street jornal...FRONT PAGE "U.S. banks posted last year their sharpest decline in lending since 1942, suggesting that the industry's continued slide is making it harder for the economy to recover."


http://online.wsj.com/article/SB10001424052748704188104575083332005461558.html?mod=WSJ_hpp_LEFTWhatsNewsCollection

Im sure the lack of lending in the banks and worst financing since 1942 plays NO part in these numbers...

Yet there is so many places for people like *US* to make money...

[fdjake]

Europe could be the first domino.....

In a way.....THAT is why I'm as bullish as I am on the U.S.  If CHINA and Europe crash????

MONEY has to go SOMEWHERE....It has to....It's not ALL gone, it  MOVES....In a China/Euro Bust.....America could be the last SAFE HAVEN.  Liquid markets, laws that protect capital (unlike Venezuela and others)

One thing I know for sure...

It NEVER goes exactly the way you think it will.

[fdjake]

I think all these articles point to ONE conclusion...

You can make DATA justify ANY argument...

Of coarse LENDING is WAY DOWN.......Americans are NOT borrowing MONEY for 2 reasons....Either their credit SUCKS or their paying down EXISTING DEBT...Either way, that's NOT condusive to lending DEMAND!.....We just came out of a DRUNKEN SAILOR SPENDING SPREE that went on for DECADES....For people here like Mike, Rookie, and Myself....WE have access to capital BECAUSE we didn't participate in the foolishness...But for the MAJORITY of Americans, They're STILL recovering from their DRUNKEN SPENDING SPREE....They're paying down debt and tightening their belts...

This is an ECONOMIC CYCLE....It happens in EVERY RECESSION...Those Recessions ALL eventually END when that debt ratio hits a certain point, then people are COMFORTABLE spending AGAIN!!  they get TIRED of SAVING and the entire PROCESS repeats itself....It's a TREADMILL.

None of this should surprise anyone here.

[propertymanager]

While top-tier banks are recovering at a faster clip, the rest of the industry is still suffering, according to a quarterly report from the Federal Deposit Insurance Corp. Banks fighting for survival, especially those plagued by losses on commercial real estate, are less willing to extend loans, siphoning credit from businesses and consumers.

'

You're right Rookie, lending is having an impact on home sales and it will only get worse.  Small banks are not in good shape and big banks are only in good shape (making a profit) because they're STEALING IT FROM THE MIDDLE CLASS through the Fed's Ponzi Scheme (loaning money to the big banks at near zero interest and then paying them interest to borrow the same money (money that doesn't even really exist).

Just so you guys know, I have changed my mind about buying more property.  I am saving $100 in Susan B. Anthony Dollars.  I figure by 2012, that $100 should buy 100 houses!!!  LOL!

This is an ECONOMIC CYCLE....It happens in EVERY RECESSION...Those Recessions ALL eventually END when that debt ratio mets at certain point where people are COMFORTABLE spending AGAIN!!  It's a TREADMILL.

I agree that it's a cycle, but not an economic cycle.  It is the cycle (lifespan) of a nation.  All nation's have beginnings and endings.  Our overspending and wreckless actions have brought us to the end of the USA!

[rookieNYC]

Mike,
 If you are right..In 2012 I will buy you a few houses...Along with a few beers

[fdjake]

I don't know if it's the end of the USA??.....But I DO agree that EVERY nation has a lifespan...

Ancient Greece

Rome

Spain..........Their ships ruled the WORLD at one time....SPAIN

England

Egypt

and on and on......

[Milwaukee]

Peter Schiff anyone?

http://www.youtube.com/watch?v=2I0QN-FYkpw

[propertymanager]

Yep, Schiff was right!  You can only consume on credit so long - whether you're a person or a once-great country!

[fdjake]

The BEST Schiff video ever was HIM calling the housing bust in 2006 and the "EXPERTS" LAUGHING AT HIM!!!

Pete had the last laugh!!

[REIER]

Did anyone else smell opportunity and saw dollar signs fly in front of their eyes while reading this besides me?