Any comments on why this jump in new home sales? Is the $8k cash incentive finally kicked in? Overall I am now optimistic about the economy. Paul Krugman said yesterday the recession is over in July 09. Not that he knows all but I think he could be right about that.
It’s the $8k cash incentive compiled with low interest rates and bargain home prices (down 12% from last year). Buyers are finally starting to have confidence again, but it took the perfect storm of incentives for it to happen …
^agree but what is going to interesting is looking forward the refi/purchase boom of lately is over- no more qualified applicants and no change in credit policy to find more applicants. In short these June numbers are inflated and just a slight bump up- in the next few months they will be stagnate at best, or more likely back in the basement.
What makes you say that boom is over? Why wouldn’t they continue something like that if it seems to be working?
chad17 Wrote: ------------------------------------------------------- > What makes you say that boom is over? Why wouldn’t > they continue something like that if it seems to > be working? i think what he’s saying is that once those who qualify for the 8k are accounted for that there will be stagnation in sales. also the rates are very low so not too many re-fis in the future.
I’m about to make an offer on a house, so the jump is very bad news for me. I can see a lot of sellers reading the headline and deciding that they don’t need to drop price or provide any allowances because they think the market is back.
I think the increasing interest rates helped some finally take the plunge. Anecdotally I know a few couples who were on the sidelines and now that rates appear to have bottomed are making offers. A couple months ago were really low, but ppl thought they would stay that way or possibly get lower- now there is more of a feeling out there that if you don’t lock in, you’ll miss out. (this of course if for those in the mkt)
Look at the median home price. Down $15,000. Homes are selling but they’re selling at large discounts.
needhelp thanks for the clarification
I purchased a home about a month ago. It was a bank owned property in excellent condition. I paid about $80 a square foot which I think was good value compared to new home construction prices and comparable sales. For us (wife and I), it is a place to live not so much an investment so we are happy with our timing. If we are lucky, we may make a bit when we finally sell it.
thommo77 Wrote: ------------------------------------------------------- > I purchased a home about a month ago. It was a > bank owned property in excellent condition. I > paid about $80 a square foot which I think was > good value compared to new home construction > prices and comparable sales. For us (wife and I), > it is a place to live not so much an investment so > we are happy with our timing. If we are lucky, we > may make a bit when we finally sell it. $80/sf? Where is that?
^ Orlando, Florida - actually $88 to be exact. Some of the areas here have been hit very hard.
thommo, you from Orlando? How’s the economy there? I heard the tourism industry took a hit. I also her that most jobs are low paying service jobs in that city.
needhelp. True, not too many finance jobs in Orlando, but like most places outside of the big cities, there are a few. To be honest, I am not sure how the tourism industry in Orlando is holding up. I know Disney has seen significant declines in traffic, but I do not have any hard and fast facts to back that up. I like the lifestyle down here though.
Too hot in FL for me, but I’d love $88/ in a nice neighborhood. Heck, I’d love anything under $110.
“Paul Krugman said yesterday the recession is over in July 09. Not that he knows all but I think he could be right about that.” The Bank of Canada came out with VERY positive language in the last week saying the recession is over (in Canada) as well. If this was true, that would make this downturn one of the shortest downturns on record. In my opinion that doesn’t fit with what we have experienced and the progression that we’re seeing to date. I think by the time this is done it has to be the biggest since 1929.
I agree with Mr. Pink. People are still doing everything they can to hold on to their decadent lifestyles, and they don’t care if they bankrupt the world in the process. A few are digging many into a deepening hole, and the worst is yet to come.
squirrel.master Wrote: ------------------------------------------------------- > I agree with Mr. Pink. People are still doing > everything they can to hold on to their decadent > lifestyles, and they don’t care if they bankrupt > the world in the process. A few are digging many > into a deepening hole, and the worst is yet to > come. Dunno about this. The US savings rate was 6.9% as of the last data point in May, up from about 0%. This is one of the steepest rises in post war history…check with teh BEA. True the post war average is about 6.95, but during the 1970s people were saving 15% for a while! There’s lots of movement on this stat in the short term, but the long term trend moves very slowly.
didnt the recession officially start in 07 or something? Thats not the shortest in history then is it?
I think the recent boom is due to people not trusting the bonds and dollars. So they would rather like holding homes and stocks than bonds and cash. This boom can sustain as long as the Fed keeps printing money (aka buy T-bonds holders with cash generated by a few key strokes) and the Chinese and Japanese keep scooping up the T-bonds.