ABBIE NORMAL HOUSING MARKET

We have new home sales at 25 year lows. We have new home sales 65% below levels of 2006, but we have prices 12% above 2006 and up 30% since 2011. Is this the new normal? Or is this the new abbie normal? I’d love to hear a rational market based explanation for how this could happen in a non-rigged, non-manipulated free market? Igor is describing Ben Bernanke’s and Janet Yellen’s brains.

Everybody knows that the dice are loaded
Everybody rolls with their fingers crossed
Everybody knows that the war is over
Everybody knows the good guys lost
Everybody knows the fight was fixed
The poor stay poor, the rich get rich

I leave it to the Dude to have the final word.


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Anonymous
Anonymous

The housing market is both regional and slanted toward upper end sales.

Some parts of the country are doing far better than others and the high end housing is booming in markets that are otherwise depressed.

You have to have breakdowns, overall averaged numbers don’t give a true picture.

Anonymous
Anonymous

Admin,

Home prices i the lower end range in Detroit or home prices in the million plus range in Colorado or New York?

Where I live it is going gang busters and a house in any range is sold about as quickly as it goes on the market and there is all kinds of new residential, apartment, and commercial construction.

I hear it is the same in parts of Arizona where I have friends living as well as Texas.

A normal supply and demand situation.

The article doesn’t seem to be connected at all to these very real markets.

Anonymous
Anonymous

Admin, the chart shows a nationwide median, not one that takes into account regional differentials.

So back to that thing about low end housing and high end housing in other places, you factor those in and you get a false median for both places.

In case you don’t understand median, which apparently you don’t, it is the point where half of the data points are above it and half below it. There are usually very few data points at tha actual median (the same as, say, I.Q. where half the population is over a hundred and half under it with very few actually scoring 100)

Things are doing absolutely great where I am, and that is being offset by things doing badly elsewhere giving a false impression of the housing market here since, as I pointed out, it is a regional situation with some areas good and some bad.

What about figuring worldwide housing starts and prices instead of just U.S starts and prices, you think that would reflect the U.S. starts, sales and prices accurately?

Llpoh
Llpoh

A couple things that may be pushing up prices:

1- desperation of small investors searching for return on their money, driving up prices
2- increased cost of materials
3- increased cost of red tape and govt charges

old dawg
old dawg

Here in Seattle there is a housing boom to beat all. Bidding wars, prices up beyond 2007, demand for rent controls, million dollar grey cubes going up in old neighborhoods all over town and selling like hotcakes.

Yet we were here in 2010 when the area was awash in foreclosures, vacant apartments, empty houses, for sale/for rent/for lease signs everywhere you looked. Um, that was only 5 years ago.

Now nobody can pay enough to live here.

Interesting though that retail has never made a comeback. All the places that were empty in 2010 are still empty.

It looks like economic insanity to me. Boom, bust, boom all in less than 15 years.

Dbacktim
Dbacktim

Anon,
You mention friends in Arizona. Metro Phoenix? I’ve been in Phoenix for 31 years. New home construction had average closings of 25-30,000 per year, save the 1989-1992 recession where the low was 9,800. The bubble years of 2004-2006 went something like 35,000 to 60,000 in 2006. The the shit hit the fan. The lows were about 7,000 closing 2009-2011. Now present day. 2014 closings, 10,200. tell me how things are booming. In fact, they will never be the same.

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