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alstry (35.03)

Record Market CRASH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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May 26, 2009 – Comments (5)

U.S. home prices fall at record pace: Case-Shiller

Could you imagine if this was the Stock Market!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

The crazy part is that U.S. Housing is a LARGER asset class than the stock market....but because most people don't pay daily attention to the price movement of their house....fewer seem to take notice....until the have to sell of course.

The joke is that the mainstream media wants you to focus on volume......could you imagine people gettting excited  if stock market crashed on high volume????

No kidding volume is increasing...in some parts of the country newer homes are selling for $0.25 on the dollar to what they sold for just a few years ago....in more distressed older neighborhoods, we are seeing prices as low as $0.05 to $0.10 on the dollar.

As layoffs increase and foreclosures accellerate, expect prices to drop further causing even more distress and foreclosures as fewer and fewer will be able to sell their homes and pay off their mortgages.  At the same time, expect the media to keep telling you that volume is stable as millions upon millions of famlies get kicked out of their homes.

We are now in the midst of the BIGGST HOUSING CRASH in American History...but don't worry....at least it is now affecting millions stabilizing volume.

Could you imagine how volume might increase if prices drop another 50%???????

Prepare.........

5 Comments – Post Your Own

#1) On May 26, 2009 at 11:33 AM, unvrsldeflation (85.13) wrote:

With unemployment heading even higher it can only get worse in aggregate. The only places where there could be an uptick under the current conditions would have to be in specific parts of the country where for whatever reason the housing market is not only isolated from the rest of the country but protected by some kind of counter trend, like region economic success.

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#2) On May 26, 2009 at 12:09 PM, awallejr (82.72) wrote:

There are only 3 words you need to know about real estate, and they are: location, location, location.

The lowering of prices are really a good thing in the long run since it helps to reach that eventual bottom.  Lower prices, fewer new homes being built are all GOOD things long run.  We still need to move out the foreclosure inventory which takes time and I submit either this year or next year at the latest should be the "peak."  Right now if you are a new buyer this is a great time to buy.  Low prices, still historically low interest rates and you get a fantastic tax credit.

We are now entering into the seasonal time for the real estate market.  End of summer stats will be worth looking at, since most people like to close before school begins.

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#3) On May 26, 2009 at 1:30 PM, leohaas (35.73) wrote:

"Prices of U.S. single-family homes fell 18.7 percent in March from a year before, according to the Standard & Poor's/Case Shiller index."

"Could you imagine if this was the Stock Market"

I would be quite happy if my 201(k) were down only 18.7%

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#4) On May 26, 2009 at 1:51 PM, finabuddy (96.67) wrote:

The stock market is not a good comparision because the housing market is nowhere near as liquid. This is why prices need to fall so homes will actually be bought and sold. awallejr did a good summary.

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#5) On May 26, 2009 at 2:04 PM, alstry (35.03) wrote:

It doesn't matter....at the end of the day, the stock market is a reflection of the discounted value of present and future earnings.

Currenly, practically EVERY asset class is CRASHING in value...Residential Real Estate, Commercial Real Estate, Morgage Debt, Commercial Real Estate, Commercial Debt, Consumer Debt.....and many of these are very liquid markets.

I have little doubt, barring some dramatic unforeseeable event, the market will follow just like every other asset class.

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