MSNBC: "No sign of cooling in red-hot housing market"

[Bush_Eats_Beef]

No sign of cooling in red-hot housing market
Latest reports show rising sales, prices, building activity



"No concern on housing
July 29: Ben Bernanke, chairman of the White House Council of Economic Advisers, says the latest data show an economy growing strongly."



"The national median price for existing homes jumped to a record $219,000, up 15 percent from a year ago, the fastest rate of growth in 25 years, according to the National Association of Realtors."

By Martin Wolk
MSNBC
Updated: 5:42 p.m. ET July 29, 2005

If you were looking for signs that the red-hot housing market is beginning to cool, you would have been hard-pressed to find them in the latest batch of economic data.

Sales of new and existing homes, already at record levels, rose again in June. Adding together the two categories, single-family home sales have gone from a rate of about 6.5 million in mid-2002 to about 8 million last year to 8.7 million as of last month.

Residential construction also has been on a tear. Housing starts have been steady at a rate of more than 2 million a year for the past three months, which is considered strong although a bit below the rate of January and February, which was boosted by hurricane-related rebuilding in the South. Investment in housing rose at a 10 percent rate last quarter and was an important contributor to the economy's 3.4 percent growth rate.

The latest pricing data also offered more evidence for what one industry analyst called a “frenzy” in sales. The national median price for existing homes jumped to a record $219,000, up 15 percent from a year ago, the fastest rate of growth in 25 years, according to the National Association of Realtors, a trade group. That pushed the Realtors’ affordability index, which compares incomes with home prices, to its lowest level in 14 years.

[rfranklin]

1. Can I sell you some Enron stock?

There's no limit to how much you can make!

[Bush_Eats_Beef]

2. There's something really fishy about this article...

On one hand, it pretty much acknowledges that the "strong, and gettin' STRONGER" aspect of the economy is being propped up by the speculators and "house flippers."

On the other hand, it's the first article I've read in a while that STRONGLY...and in multiple instances...asserts "This ain't no FLUKE, folks! The good times are here and they AIN'T goin' away!"

Meanwhile, I still know plenty of people with CRAP jobs, NO jobs, so who's BUYING these wonderful American Dream Homes?

I also posted a story on DU the other day about a woman who came here from the Dominican Republic. She bought an overpriced shack...and was told she COULDN'T SEE THE INSIDE OF THE HOUSE but bought it anyway...and when the papers were signed and she was handed the keys, she saw that there were large holes in the carpet and the toilets and tub had been ripped out of the floor. She spent the last $13,000 she had to her name to fix it up...and that wasn't enough.

[anarchy1999]

3. Nothing at all fishy! The rich are getting richer and the poor are

getting poorer. Move along now. Absolutely nothing for you to see here. Now go.

[Bush_Eats_Beef]

5. OK, and here's the point where I reveal just how damned naive I am...

WHY are there no stories that JUST COME OUT AND SAY "The rich are getting richer and the poor are getting poorer?"

The housing market has become the stock market. It's driven by speculation. The CEOs who sent half of their company's jobs to sunny Bangalore are the ones who are buying six, seven, eight houses and "flipping" them for profit so they can buy six, seven, eight more and allow wrinkled bastards like Greenspan to tout out "roaring economy."

And we're supposed to sit here and call the kids into the living room, pop some tasty popcorn, pour some icy-cold Cokes and give ourselves a big group hug over the fact that the "red hot housing market shows no sign of cooling?"

:grr:

[anarchy1999]

7. Yep, you are on it. Go pop some popcorn and make sure it is

lathered in lots of butter with parmesean cheese on top!

Everything is just fine, don't you know?

[leftofthedial]

16. and the middle class continues to shrink

more and more and more of these houses are the empty shells of another dead middle class family either moving down or just out.

[Lone_Wolf]

11. They are setting the suckers up for the big cashout...

People will start taking out home improvement loans because their houses have appreciated dramtically in price.

Some of this money will start entering the stock market. Stocks will start to rise and then the cheerleaders on CNBC will start pushing the bull market. People will start to flocking to stocks. Market will go crazy and then suddenly crash leaving the suckers holding the bag.

Meanwhile, the insiders will have quietly cashed out while the stock market was at or near the peak.

The moral of the story is you know it is time to cash out of the market when USA Today has a headline in it's money section touting the stockmarket.

[mbee]

4. Read a disturbing article in the news last week that peole now are

getting 40 year mortgages and they have all types of payment plans now. For instance you can choose in some cases how much you want to send in for your monthly payment and this could cause your balance to be higher than the purchase price. These are the scary items beneath the surface that are going to come back to bite people!

[Skink]

6. After the crash we'll be able to buy a house cheap....

That is if credit is still available.

[anarchy1999]

8. Or in other terms, what will your dollar be worth?

Careful.

[JohnyCanuck]

9. If the year were 1634, MSNBC would no doubt be reporting,

"No sign of cooling in red-hot tulip bulb market."


Initially, only the true connoisseurs bought tulip bulbs, but the rapidly rising price quickly attracted speculators looking to profit. It didn’t take long before the tulip bulbs were traded on local market exchanges, which were not unlike today’s stock exchanges. By 1634, tulip mania had feverishly spread to the Dutch middle class. Pretty soon everybody was dealing in tulip bulbs, looking to make a quick fortune. The majority of the tulip bulb buyers had no intentions of even planting these bulbs! The name of the game was to buy low and sell high, just like in any other market. The whole Dutch nation was caught in a sweeping mania, as people traded in their land, livestock, farms and life savings all to acquire 1 single tulip bulb!

In less than one month, the price of tulip bulbs went up twenty-fold! To put that into perspective, if you had invested $1,000 and came back on month later, your investment would have ballooned to $20,000! Now you can understand the mad rush to buy tulip bulbs at any cost. Tulip bulb mania affected the public psyche to an extreme. One drunk man in a bar started peeling and eating what he thought was an onion, while it was in fact it was the bar owner's tulip bulb on display. This man was jailed for many months!

All common sense and logic was thrown to the wind, and even scoffed at. This is exemplified by how many USEFUL items it cost to buy 1 single tulip bulb:

• four tons of wheat
• eight tons of rye
• one bed
• four oxen
• eight pigs
• 12 sheep
• one suit of clothes
• two casks of wine
• four tons of beer
• two tons of butter
• 1,000 pounds of cheese
• one silver drinking cup.

http://www.stock-market-crash.net/tulip-mania.htm

[Lone_Wolf]

10. Look for the snakeoil salesmen on CNBC to start cheerleading stocks...

There's time for one big market run-up and a big crash while * is still in office. The corporate crooks will cash out before everybody else does and take a lot of money from the suckers who will be left holding the bag. The crooks know they can avoid prosecution with * in office because he's one of them.

[Ian David]

12. See related (contradictory) threads and article

MSNBC: "In housing boom, scammers discover a Golden Age"
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=104x4217981

More housing bubble stuff....
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=104x4209660

Also:

Home won't sell? Some cancel and relist

Agents aiming for fresh appeal

By Kimberly Blanton, Globe Staff | July 22, 2005

To remove the stigma attached to a house that won't sell and make a fresh appeal to home buyers, some real estate agents reset the clock on the number of days a property has been listed -- a practice critics liken to resetting the odometer on a used car

Agents can cancel a listing and create a new one for the same house in the central database of Massachusetts homes for sale, the MLS Property Information Network. The ''new" listing is then dispatched, electronically, to agents who generate a ''hot sheet" for clients of new houses coming on the market.

''We see it everywhere," said Patrick Lashinsky, vice president of California-based Zip Realty Inc., which makes regional MLS databases around the country available to customers, including home buyers. ''Agents know that if they're at the top of the list as being a new listing, that's when you generate the majority of your client traffic for the home you're selling."

The number of canceled listings in Massachusetts has nearly tripled since 2001, a sign that one of the hottest real estate markets in the country is beginning to cool down, said real estate specialists. It ''tells you is the market is softening. Demand is declining," said Karl Case, professor of economics at Wellesley College.

More:
http://www.boston.com/news/local/massachusetts/articles/2005/07/22/home_wont_sell_some_cancel_and_relist/

[NewJeffCT]

13. it's cooling in Connecticut

Prices are still creeping up, but houses are definitely on the market longer than they were just a year ago & new home construction has slowed down from record breaking levels of the past few years.

I don't expect it will crash here in Connecticut, but I think prices will dip a bit here and go down more sharply in a few select places around the country.

[Lannes]

14. Dont forget property taxes

Bushies trump all the middle class people getting houses because of low interest rates but the fail to mention that this boom also means higher property taxes some more than 30%.

Taxes can wipe out the meager cuts the middle class received recently.Some cant sell their house because they cant afford to take the hit that would come with selling it.

[KharmaTrain]

15. The Rich Are Getting Richer...The Rest...You're Not Good Enough

This is one of those "things are good, if you aren't benefiting, then you're not doing good enough or not worthy".

It's great to know my home is worth twice as much today as it did when I moved in 12 years ago, but I don't plan to sell, don't plan to get a second mortgage or playing the bank/real estate games. This smells like a couple games at one...

First, mortgage rates are starting to go up. Good chance we'll see 6% and 7% rates in the near future and those who are jumping into the market now will be the poor suckers to will pay those rates.

Sounds great when you can sell your house for big bucks, but to find something comprable or better means not just paying the higher costs, but the many fees that go along with it. Higher commissions, higher interest payments, higher property taxes and so on.

So, if you've got more money, housing bargains abound. But I see the opposite going on in my area. Thanks to the great bushit economy, people can't afford the houses or have to downsize to stay at about the same rent/mortgage payments. We've had two young people nearby who moved from their homes into rented townhouses...the opposite trend of what had happened in this area for decades, cause the taxes and housing costs were eating them alive.

So, if you've got money and a hole to burn in your pocket, the real estate markets the place to speculate. But if you're trying to buy that starter home...forgetaboutdit. Trying to find a little bigger home without spending a left ventricle? Be ready to move 40 miles into the hinterlands.

The misinformation this regime uses to paper over one of the worst economies in the past 100 years is just as bad as their lies about wars.