NYT: Housing Not Out of the Woods Yet
“Plenty of pain yet to come,” is how one economist summed it up in an article in the New York Times this morning about the country’s housing market. The article’s main point is that the improving data we’ve seen over the past three months may very well be a head-fake rather than the first leg…
“Plenty of pain yet to come,” is how one economist summed it up in an article in the New York Times this morning about the country’s housing market. The article’s main point is that the improving data we’ve seen over the past three months may very well be a head-fake rather than the first leg of a recovery:
Artificially low interest rates and a government tax credit are luring buyers, but both those inducements are scheduled to end. Defaults and distress sales are rising in the middle and upper price ranges. And millions of people have lost so much equity that they are locked into their homes for years, a modern variation of the Victorian debtor’s prison that is freezing a large swath of the market.
Closer to home, the data from Case-Shiller show that New York City is still holding up relatively well, with prices down just 10 percent over the last year, as compared to 30 percent in Las Vegas and 15 percent in Seattle.
Fears of a New Chill in Home Sales [NY Times]
Graph from the New York Times
BHO, I am not sure I agree with you about Goldman employees worried about their jobs. Just to give you a sense of how powerful and protected they are, the previous treasury secretary Hank Paulson was in the same room as their current CEO, Lloyd Blankfein, discussing lehman’s fate, during the crisis last fall. I can bet my last dollar that Goldman can always draw on tax payer help again if they needed it.
Last minute looting, stevieb (still an outrage though). Your typical Goldman employee is worried about the future of their job.
***Bill Thompson for Mayor (TUESDAY!!!)***
As much as I hope you guys get your dream houses, “patient buyers” might be waiting upwards of a decade by your outline here BHO. That’s a lot of patience…
Short term deflation, long term inflation and quite possibly hyperinflation. That’s my call.
Interest rate hikes are inevitable but won’t affect patient buyers as prices will eventually self-correct for this, independently of corrections already in place.
15% NYC unemployment by next year. 25% plus before real recovery.
***Bill Thompson for Mayor (TUESDAY!!!)***
BHO, i hear you but your anecdotes only support my view that the housing bust is only affecting the low to middle class in new york city, like with the rest of the country. The wealthy bankers are able to receive fat bonuses through tax payer bailouts (TARP) while the rest of the country burns. I can’t see how this is not legalized thievery. Wall street was able to blackmail the american taxpayers into handing over trillions to them by threatening economic collapse if they did not. Now that everything is better and they are paying out huge bonuses even at the banks that still kept tarp money, the public is justifiably outraged.
***Bill Thompson for Mayor***
Yes, this is part of why I am patient. I think NYC has not yet bottomed out, and see no reason why prices would go up anytime soon. When we find a place we love that we can afford, we will buy but we are in no rush since reports like this are further confirmation that time is on buyers’ side.
Team Bull Crap needs far more than one man, joe. Matter ‘fact, it’s not even a team anymore. And I heard you stutter when you said “prices have basically bottomed”.
***Bill Thompson for Mayor (TUESDAY!!!)***
“….bond mkts can’t have bubbles” ….ever hear of Argentina?? Joe do u think the US $ will be weaker or stronger in 2040 ?? ($ vs anything u can think of)
oh you beat me to it.