US Home building slump
US incentive programs for home buyers have expired and it looks like the real estate industry hasn’t got enough momentum to lift the US economy. Even with rock-bottom interest rates the industry is slumping.
WASHINGTON – Homebuilders are sending a message: They won’t be able to contribute much to the economic recovery now that government home-buying incentives have vanished.
Home construction and applications for building permits sank in May, overshadowing favorable reports on manufacturing and wholesale inflation.
Fewer homes mean fewer jobs. Construction fuels a broad swath of industries across the economy. Yet double-digit unemployment is among the main reasons people have passed on buying new homes.
The solution is simple. Government must take on more debt and pour more stimulus dollars into the economy, then the problem will be solved and everyone can get back to living the good life.
June 18th, 2010 at 8:31 am
Uh oh, Germany lose to Serbia in FIFA hi-fi. They will not be in buying mood, good time to snap up B&B properties in the interior of BC. Then can flip for big cash when Germany beats Ghana. See bears, lots of money making opportunities. You too can be so damn rich.
June 18th, 2010 at 7:24 am
"http://www.realtor.ca/property…..Id=9530645
http://www.realtor.ca/property…..Id=9563285…&…
I'll take the cheaper one IF I want to move to Abbotsford, the vendor cuts the price even more, IF I can get a good mortgage rate and IF the seller will throw in some upgrades…ain't selling FUN!
June 18th, 2010 at 7:23 am
@Keeping an Eye on The Pimps:
http://www.cato.org/pub_display.php?pub_id=4243
Money see, monkey do.
June 18th, 2010 at 7:02 am
No bubbles please, we are Canadian.
http://www.montrealgazette.com/business/Canada+ho…
"This mythical creature terrorized credulous analysts and journalists in recent months, only a short while after some of these same unhappy people had been shaken by the equally nonexistent Canadian housing-market collapse."
Just be prepared to read a lot of these pumper stories frequently for a while.
A fine balancing act, they can't deny the slowdown, but they will apply the lipstick to the pig- it good to slow a little leg to the advertisers.
June 18th, 2010 at 5:35 am
@Recently bearish:
I've been watching my local market intently. It is conservative to say that the local condo market is very competitive.
It is without exaggeration that I say that the condo market price here on average is 20% below peak (2008). This is especially true in the new condo market.
What do you do when the developer undercuts you? These units were in the mid to high two's on presale. Here is an example of a flipper trying to get his initial money and costs out (including RE fees), and the next example is a the new lower pricing for the building from the developer.
http://www.realtor.ca/propertyDetails.aspx?proper…
http://www.realtor.ca/propertyDetails.aspx?proper…
These two units are not exactly comparables, but I can tell you that the difference is only Sq ft related. I've walked through and this is the worst of the worst spec buildings out there. No special vaults or anything.
Also on a side note, regarding the name of the realtor. I had a friend from England who saw his name flash by on a bus and started laughing hysterically…
June 18th, 2010 at 2:28 am
@space889:
Any loan secured by the equity on real estate is a mortgage by definition. Some people might not call a HELOC a mortgage, but I guarantee that's what it says on the land title.
There really are a lot of people who have paid for houses. For example, remember that up until very recently all retirees were pre-boomers and had quaint values such as believing you should pay off your house in 25 years.
Also remember that Canada-wide (or US-wide) statistics include places where houses historically have been cheap or have been passed down within families.
June 18th, 2010 at 12:51 am
@Newcomer:
"If this is an investment, you are missing some costs, "
I'm talking about a primary residence.
June 18th, 2010 at 12:50 am
@Tony Danza:
"You’re analysis is worth less than nothing."
With a grammar mistake like that the rest of your words are worth less than nothing.
Try actually doing the numbers, rather than just whining about them, and come back when you have something to add to the debate.
June 17th, 2010 at 9:55 pm
#104 grimreaper Says:
June 17th, 2010 at 9:14 pm
@Tony Danza: That’s funny coming from a retard bear who been wrong for more than a decade. Rent is due in 13 days.
——————————————-
What's wrong with paying rent in 13 days?
Unless you are mortgage free, your mortgage payment is also due in 13 days……also, have you put money aside each month for property taxes, roof repair, blown water tank (and if it's a condo you have, special assessment), etc….
June 17th, 2010 at 9:37 pm
Oops I meant 179 sales. 179 for the month would put sales at around 3900. To put that in perspective, 3800 is the MINIMUM required to stave off month-over-month price drops with current inventory levels.
At best it's not bearish but hardly bullish.
June 17th, 2010 at 9:29 pm
@paulb.: So 179 listings is bullish? LOL
June 17th, 2010 at 9:18 pm
Well I'm the most interesting man in the world and when I drink beer I choose Dos Equis. And when I chose where to live I choose to own a condo in Vancouver.
June 17th, 2010 at 9:14 pm
@Tony Danza: That's funny coming from a retard bear who been wrong for more than a decade. Rent is due in 13 days.
June 17th, 2010 at 8:06 pm
@McLovin:
Sorry, but I coined the term ‘Realturd’ a couple of years ago on Garth’s blog and had it copywriten too. You therefore can’t use the term ‘Realturd’ without my written permission. You may consider calling them ‘Fucksticks’ instead.
Oh, hell, just keep calling them realturds!!
Sorry Chilled, I read it somewhere, might have been Garth's blog and having been using it ever since. I can't think a more perfect term!
June 17th, 2010 at 7:30 pm
@Anoymous:
If this is an investment, you are missing some costs, and it is ridiculous to assume such low interest rates over the life of the loan but, even if your calculations were right, that would not be an argument against a 50% drop. What you are saying is that, if interest rates state at historic lows, and rents stay at historic highs then, after a 50% drop it would be a good buying opportunity. Who here is disputing that. Prices would probably go up under those conditions. Prices overshoot on the way down.
I don't know how old you are, but I think there is a good possibility that you have never seen a normal market where investors buy RE and rent it out because that gives them a couple hundred bucks a month while the mortgage is being paid off for them. That sort of situation is not a weird anomaly that could never happen. That's normal.
June 17th, 2010 at 7:10 pm
The past two weeks I've been looking daily at listed prices vs. sale prices for every sale in Vancouver (East and West). Didn't keep track of specific numbers, but would estimate 80% of the properties sell under listed price, 5% sell over and 15% sell for asking. Most sales are 5-10% under asking, but some have greater reductions than that. Certainly a different market than last fall or earlier this spring.