Home prices rise in 17 cities in June

So your vote is for economic depression?

So your vote is for economic depression

I don't vote Liberal/Progressive, nor do I "Fib".

and sales hit a ten year low in July....

this is not news people

a desperate grab for that "hope" stuff?

I don't vote Liberal/Progressive, nor do I "Fib".

What does that have to do with my question?

Do you think the government should intervene in the economy or let it collapse?

Government intervention, more often than not, is the problem...... not the solution.

Prices going high is not nice, if you're buying a home. If you're having one or more already, then it is nice.

more often than not, is the problem...... not the solution.

Still not an answer. It isn't too late to go for full depression. Yes or no?

James Andre:

Do you think the government should intervene in the economy or let it collapse?

I'll take the question. By giving an $8000 tax credit, the goverment pushed prices that much higher. To take it a bit further, a $50,000 credit may have "sold" more houses, but the prices for those houses would just go up. Through a tax credit, you have non-homebuyers subsidizing home buyers, and part of the purchase price is "fluff", the amount of the credit. The tax credit buys nothing but more debt to the taxpayer, and more debt to the buyer.

We don't need high home prices. We had plenty of that since 2002, people are still working on choking down that debt (when they puke up the debt, they get foreclosed on). When people have high mortgages, they have less left over to buy consumer goods.

We had a huge binge for 7 years. Over that time period, the high home prices somehow made everyone "rich". People's income did not increase, but their debt load did.

It's time for a purge. We need massive foreclosures, massive price decreases, and huge restrictions on how much people can borrow.

College tuition same thing. It's been made "more affordable" with the easy availability of loans. Easy money = higher prices, unless college professors get 10% raises each year.

It's time for a purge. We need massive foreclosures, massive price decreases, and huge restrictions on how much people can borrow.

And do you think the effects will be limited to housing, or will they affect the entire economy?

James,

What makes you believe that we are not currently in a depression, despite the best efforts of our government?

Rickeroo,

You have hit the nail on the head.

What makes you believe that we are not currently in a depression, despite the actions taken by the government?

I wrote "collapse" and "full depression." I made no comment on the current state of the economy. Care to answer the question?

James Andre:

And do you think the effects will be limited to housing

Not at all. The effects of foreclosure will effect the entire economy, just like paying high mortgages for 8 years has.

I bought in 1999. My payment is $734 a month.

If I bought the same house in 2005, my payment would be $1357 a month.

So now I have $600 less each month to spend on consumer goods. Multiply that by every poor fool who bought from 2002 till today, and you have lots of money not going to consumer goods. Stores aren't selling as many goods, don't need the workers...

The longer prices stay high, the more it's going to hurt when they finally come crashing down. They should have crashed in 2005, but instead they went to unfathomable levels.

If I bought today, my payment would be $1114, still too high.

Not at all. The effects of foreclosure will effect the entire economy, just like paying high mortgages for 8 years has.

Quite realistic. I think you're probably right. The only qualification I have is that while the markets should collapse, public aid should not.

What does that have to do with my question?

Here's a comb, to get rid of the new part!

Only a Liberal would want government intervention, with our money. Nothing has been proven that anything done by this administration, or any other administration, stopped anything. Only confidence from any government, will get the private sector going. So far, "NO" confidence exudes from this administration, only speculation.

Do you think the government should intervene in the economy or let it collapse?

No intervention, especially from this administration. Has anyone proven there would have been a total collapse without it, because, what's happening right now, sure does seem like it didn't help one bit.

We've gone from 5% Growth to 1.6% Growth since all the money was flying around. And Fannie and Freddie have a blank check from the government and are still asking for more.

Kinda Like Government School's. They keep throwing money at it decade, after decade, and it's still failing. Just ask those that do the studies, showing the U.S. is behind other nations in the education realm.

while the markets should collapse, public aid should not.

I'd agree with you here. Hopefully taxes weren't raised, and public aid not increased, based on the bubble. If they were, then the decrease would seem severe, but not compared to 1999.

Actually, to truly even this out, prices would have to go below 1999 levels for a time in order to counteract the huge runup from 02 to 08.

Nothing has been proven that anything done by this administration, or any other administration, stopped anything.

well no proofs that you will every accept because they go against your preconceived ideology.

there is a reason the entire g-20 you know the richest nations in the world, are doing the same thing obama is. And not a single solitary one of the 20 richest nations in the world are adopting your do nothing stance.,

WHICH IS HOW THE RECESSION STARTED AND GOT SO BAD.

but put anti regulatory people like cox in charge of oversight of the SEC and fraud investigations when down as fraud went up.

we were in a recession since dec 2007 and bush ignored it, and hoped it would go away. IT DID NOT.

WE tried it your way and things just got much much much much worse.

and by the way, 3000 teachers jobs were saved by government intervention in my state. Go ahead and look at your state, if you claim the government didnt help @!$%#, you are lying.

James, in answer to your original question...

Do you think the government should intervene in the economy or let it collapse?

If I may, I'd like to point out a common liberal tactic... control the argument by controlling the language.

You present only two options, as if those are the only two possibilities. They're not.

Rather than "collapse" I would use the word "readjust".

Home prices were made artificially high through government intervention. In both creating easy money and inflating the number of buyers, through programs like the Community Reinvestment Act.

More buyers + easy money = high house prices.

It became almost a right to own a house. Everyone thought that no matter how much they paid for a house, the value would increase every year. Many bought homes with little or no money down and ajustable rate mortgages.

Being where we are, the "market" is trying to adjust. People are now aware of the dangers of an Adjustable Rate Mortgage, so they're staying away from them. This means less buyers. Less buyers means prices come down.

When prices come down to the "correct" level, buyers who can afford a normal fixed rate mortgage will buy.

So you see, we don't need the Government to continue an artificial inflation of home prices. We need to let the market readjust to realistic levels. Those of us who bought high, will not be looking to sell any time soon. Over the long term, this will mean less houses on the market and prices will slowly increase. When this happens, vacant houses will be picked up for a song, and "house flippers" will start to make money again.

No economic collapse. Some tough times for builders who have been spoilled by the glut, but they will adjust to the market, as they always have.

there is a reason the entire g-20 you know the richest nations in the world, are doing the same thing obama is

Not Really!

http://www.france24.com/en/20100612-france-plans-cut-spending-45-bln-euros

France joined other European nations in announcing on Saturday an austerity plan that would involve 45 billion euros (54.5 billion dollars) in spending cuts over the next three years.

The prime minister broadly outlined where the savings would come from, including 45 billion euros in spending cuts and five billion euros from closing tax loopholes.

Rickeroo

Actually, to truly even this out, prices would have to go below 1999 levels for a time in order to counteract the huge runup from 02 to 08.

Sounds reasonable. Would that be to force the draining of the pools of labor, capital, and credit?

Has anyone proven there would have been a total collapse without it

I think Naughtia answered that one pretty well.

If I may, I'd like to point out a common liberal tactic... control the argument by controlling the language.

I would suggest not worrying so much about semantics. Remember the language in the OP that started this thread.

Not Really!

You do realize that Obama has not only proposed but enacted an equivalent amont of cuts?

Oh, don't tell me, I know, "His new program's won't cost a dime".

Spending, but not so much spending, is still spending. That sounds like my wife.

"Honey, I saved 20 dollars today on the 190 dollars I spent.

$1.3 Trillion in extra spending, to save 200 billion, is still $ 1.3 Trillion in spending, period.

France unveils $33B stimulus plan

Your Link was February 2, 2009.

My Link was this year, June 12, 2010!

France and Germany have had a change in policy, since their "Stimulus" packages didn't work. Time to cut spending!

James Andre:

Sounds reasonable. Would that be to force the draining of the pools of labor, capital, and credit?

You bring up a good point. It is true that a lack of buying new houses will put other businesses out of business (carpenters, electricians, perhaps appliance manufacturers). Any business that depends on a home being purchased had a field day from 2002 to 2008, and is now suffering.

However, with the drastic increase in mortgage payments reducing people's disposable income, now you have every other business suffering as well.

I think on balance, lower home prices would help the general economy more than higher prices would. Based on personal experience, my 1999-class mortgage payment allows me to spend freely week to week, while a 2005-class payment would not.

my 1999-class mortgage payment allows me to spend freely week to week,

That's what I was getting at. To take advantage of the new level of liquidity (from lower prices, and people cashing out), we would have to begin to utilize the unemployed and the capital reserves.

I was really wondering if you think 1999 specifically is necessary.

we dont need housing to go up, we need to slow it;s drop.

Not sure why republicans cant get the idea that the entire point was to reduce the speed of the collapse to something we could handle a bit better.

It's really not something you have to be a brainiac to understand just something you probably have to graduate higher than 895 out of a class of 899.

either way you get a collapse teh republican Idea is to turn the collapse into positive growth...you lefties just thinkk that negative growth is ok if it goes sloow...every person who does not pay cash for their house should have positve growth in the value of their home just to break even if they sell, to cover the price of the home plus interest rates....this is why lefties should get an accountant to speak for them instead of letting their idealogy speak for them.

we were in a recession since dec 2007 and bush ignored it, and hoped it would go away. IT DID NOT.

so what you are saying is that we have been in a recession ever since the Democrat gained control over the House and Senate....but when you turn 25 or start to have a family thing will make more sense to you.....

17 cities.. out of how many in the states?

all it takes is reading the headline and I thought republicans were good at that.

Very few people believe that housing prices don't have a lot further to fall before stabilizing never mind increasing.

Very few people believe that housing prices don't have a lot further to fall before stabilizing never mind increasing.

Frankly they'd be wrong in terms of affordability.

So long as enough housing is kept off the market and the labor market doesn't implode, housing will be at a stabilization level within the year.

http://mysite.verizon.net/vzeqrguz/housingbubble/

Inflation adjusted median home price trend. We're almost at the inflation adjusted price trend in long term historical terms. Inflation adjusted trendline is around 158k or so. So, maybe another 10% drop and housing should be about right.

That is, barring some sort of a melt down.

Housing prices rose around 72% on a national median basis during the run up, they've dropped 30% (which is the same as a 60% rise) so it really does not have that much further to drop.

Wanna bet?

Even at historically low interest rates for 30 year mortgages, the market ain't movin' and bank owned properties and existing inventories are at record highs.

Wanna bet?

Even at historically low interest rates for 30 year mortgages, the market ain't movin' and bank owned properties and existing inventories are at record highs.

Depends on what you are looking at.

New Home Inventories are actually at an all-time low. And I don't know if total inventory is at a record high, it's at about 11-12 months currently.

Household formation is outpacing New Housing Starts by a huge amount. Now, of course, some of those households will become renters, but even if you take it down 50%, New Households still outpace New Housing Starts easily.

Americans (and rightfully so) are hesitant to return to spending. They have boosted their savings to a 20 year high, and have trimmed househeld debt over the last few years. No reason to go gunho back into the market.

We've always known this market will take a long time to get back and it could be 5-10 years of little to no price appreciation. But affordability is about in line with these new households and builders have been underbuilding for about 4 years now.

So, yeah, I'd take a bet it doesn't drop more than 15% from the current Median of 176.9 nationally.

I'm looking at aggregate national figures as evidenced by volume of sales and median prices. Nothing more, nothing less.

I will bet you any amount that a year from now these numbers won't be higher and will more likely than not be lower than they were for 2010.

Damn, it timed out on me while editing. To make it easy, we can use the Case-Shiller U.S. National Values Index published here: Case-Shiller Home Price Indices.

The overwhelming majority of home sales this past year were to take advantage of the $8,000 tax credit as evidenced by one of the largest drops in sales in history the month following the expiration of the tax credit. There is no real demand out there. The prices nudged upwards solely from the effect of sales being pushed forward to take advantage of the tax credit before it expired. Given the current mood in D.C., I don't expect much more in the way of "stimulus" measures being passed unless the economy really nosedives all of a sudden.

I'm looking at aggregate national figures as evidenced by volume of sales and median prices. Nothing more, nothing less.

I will bet you any amount that a year from now these numbers won't be higher and will more likely than not be lower than they were for 2010.

I never contended they would be higher.

See what I said. I said I expected they may drop another 10%. I said I'd bet they don't drop more than 15%.

So, maybe another 10% drop and housing should be about right.

So you're response to that was "wanna bet" so now you're changing the bet?

I will bet you any amount that a year from now these numbers won't be higher and will more likely than not be lower than they were for 2010.

My response is, I will bet any amount of money that housing values do not decline more than 15% at any time within the next 5 years from where they sit currently. That would be a decline below 150k on the median.

Damn, I thought I could make some money on a put option on the Case-Shiller Index. I'm not willing to go into straddles and collars and such. They're too exotic for me.

Oh well.

So