Why nobody wants to buy a house

[MNeagle]

Why nobody wants to buy a house
Commentary: With government bribe money gone, so is any sane demand

CHICAGO (MarketWatch) -- Nobody wants to buy a house. Nobody in their right mind anyway.

Oh, sure, a lot of gullible first-time buyers got lured into the market over the last 18 months to take advantage of an $8,000 federal tax credit (not realizing how little that money will make a difference when the first property-tax bill hits at the same time the roof springs a pesky leak and the city hits you with a special assessment for sidewalk repair). But that tax credit has expired and with it any semblance of demand for homes.

The July data on existing-home sales show just how much the tax credit skewed the housing markets in the months it was in effect. Sales plunged 27.2%, the biggest one-month drop on record, and inventories of unsold homes jumped to 4 million, a 12.5-month supply at the current sales pace, the worst that measure has been in at least 11 years. Read more on the plunge in existing-home sales.

Because of the original timing of the tax credit -- you had to sign a contract on a house by April 30 and close by June 30 (the closing deadline was later extended to Sept. 30) -- it was obvious that sales would get an artificial boost in June as buyers rushed to beat the deadline (existing-home sales are reported once they close, not at the contract signing.) And by extension there would be a big drop in July.

Don't think, though, that July is just a one-month aberration. Sure, the numbers are record-breaking bad and August isn't likely to see any such extremes. But August isn't likely to show any increase in activity either. And don't hold your breath for September. Or October, November, December. In fact, don't hold your breath at all waiting for a rebound in housing because all you'll do is turn blue and suffocate.

Nobody wants to buy a house because in order to buy a house you have to have some bit of confidence in the future. And today there isn't much confidence in anything that has to do with the economy.

Forget about talk of another big drop in housing prices being needed to spur demand. Prices have already fallen 25% or more from their peak in many areas as distressed sales made an outsize impact in the market. That demand, too, has been slaked. Listen to a radio report on how much farther home prices could fall.

No, the only thing that will turn this mess around is jobs. Until this economy can put people back to work -- and put them back to work gainfully, full-time, using their skills and not merely temping in some capacity way beneath their experience -- it won't be able to instill any confidence that buying a house is a good idea.

http://www.marketwatch.com/story/why-nobody-wants-to-buy-a-house-2010-08-24?siteid=rss&rss=1

[Grand Master Melon]

I want to buy a house I just don't want to have to finance it and since I don't have 100k sitting around that's a problem.

I could go FHA but I don't feel right about it but then again I wouldn't feel that bad about it either. If tshtf I don't think I would be worried about not technically owning my house either.

I'm still at a loss as to what to do.

[Twisted Titan]

Nobody wants to buy a house. Nobody in their right mind anyway.


How long have I been using the EXACT same verbage???


The first property-tax bill hits at the same time the roof springs a pesky leak and the city hits you with a special assessment.


How long have been talking about property taxes being the 900 pound gorrila in the room???



The Only reason to buy a piece of property nowadays is if it is a decent clip away from a major metro area and you have a nice plot of land with resonable covenants surrounding the use of said property.

Anything else is literally a fools errand.


T

[Twisted Titan]

I want to buy a house I just don't want to have to finance it and since I don't have 100k sitting around that's a problem.

I could go FHA but I don't feel right about it but then again I wouldn't feel that bad about it either. If tshtf I don't think I would be worried about not technically owning my house either.

I'm still at a loss as to what to do.


My foolish advice:

Continue to stack Gold and Silver chips until the uncollectable taxes with unfinancible mortages with non sustainable wage declince collides together in a unprecendented explosion of mayhem that will leave entire municipalities utterly destroyed.

You should be able to cash in your gold and silver chips ( in the new currency of the day) and purchase a choice property at a very reasonable price.


No matter what you "see"today hold fast to the axiom.



http://www.youtube.com/watch?v=rIE2GAqnFGw

[Gknowmx]

I agree with this.





I want to buy a house I just don't want to have to finance it and since I don't have 100k sitting around that's a problem.

I could go FHA but I don't feel right about it but then again I wouldn't feel that bad about it either. If tshtf I don't think I would be worried about not technically owning my house either.

I'm still at a loss as to what to do.


My foolish advice:

Continue to stack Gold and Silver chips until the uncollectable taxes with unfinancible mortages with non sustainable wage declince collides together in a unprecendented explosion of mayhem that will leave entire municipalities utterly destroyed.

You should be able to cash in your gold and silver chips ( in the new currency of the day) and purchase a choice property at a very reasonable price.


No matter what you "see"today hold fast to the axiom.



http://www.youtube.com/watch?v=rIE2GAqnFGw

[etc]

http://www.nytimes.com/interactive/business/buy-rent-calculator.html?_r=1&oref=slogin

better to buy or rent?

[Silver Rocket Bitches!]

The last wave of buyers were induced by deficit funded incentives.

Those home buyers used that credit to go on vacation and buy "toys."

No incentives = no buyers.

[Twisted Titan]

http://www.nytimes.com/interactive/business/buy-rent-calculator.html?_r=1&oref=slogin

better to buy or rent?


It is not a black or white issue any more but many shades of grey.

Renters certainly have the power but it is far from absolute.

When looking into a rental property I would flat out ask to see incontrovertable evidence that the mortages is current on said property.

Cause you better believe more and more land lords are getting hip to the game that the house is going down in flames but they will put on just enough of a front to make you think all is well until the sherif comes with the pad locks especially if it is a property that the mortage holder beileves they can quickly sell to recover some of the moratage amount. God be with trying to get your money back and you may have your property sold.

It is a horrible situation to be in and more renters are finding themselves in that exact same secenario

My second piece of foolish advice is;

Dont be afraid to ask uncomfortable questions. Anyone lanlord that becomes defensive at being posed such revlevant questions is either one of two things:

A) Still living in the past and has uttertly failed to grasp the new economic climate of the day

B) Is mad as hell that you are one less person they cant run that bullsheet scam on.

[Grand Master Melon]

http://www.nytimes.com/interactive/business/buy-rent-calculator.html?_r=1&oref=slogin

better to buy or rent?


I've thought about it and unless you're buying outright you're really just renting with of course the added responsiblity of liability for things that go wrong with the house. Then again due to my not liking to deal with my landlord at all I almost always fix all the problems myself anyways.

[etc]

The biggest problem with the 'buy or rent' link above is that it ignores the other alternatives. E.g. buy a really cheap property with cash, in the country. It's comparing buying one house vs renting the same house, maybe a non-needed expense.

Renting is a huge waste, you are not building equity but you are not building equity by buying either, not anymore. I lost 50K in the last 3 years on rent but I would have lost a lot more had I bought 3 years ago, in 2007. One family I know bought a townhouse for 350K and it's down to 250K now, maybe even less. Next door to them is a similar townhouse that cannot sell for 170K. Hard to say what the prices are since listed prices are a fiction.

The loans that are made today are created out of thin air for the most part. The bank doesn't really loan you anything. The loan is fictitious, it takes them 30 seconds to juggle the zeros on the computer screen - but you have to work for 30 years to pay it off, not so fictitious on your part.

Anybody see something wrong with that picture?

But the credit-generating machine is grinding to a halt, which is the basis for today's inflated house prices that extends easy credit to everyone. When credit was difficult to get 4 decades ago, houses cost 1/10 of what they do now. I wonder if some day we shall see 1980's or 1970's or 1960's prices. Probably not, for a number of reasons.

[Joe King]

What needs to happen is to just dump all the forclosures onto the market right now, bottom the prices out across the board and let the chips fall where they may.

That way a whole new wave of people could suddenly afford to actually buy a house {possibly outright} and the glut of houses would be gotten rid of a lot quicker.
Which is what the market needs if anyone ever wants it to start recovering.


Which is why alot of people aren't buying right now.
It's the old, "the other shoe hasn't dropped yet", syndrome.

[Twisted Titan]

What needs to happen is to just dump all the forclosures onto the market right now, bottom the prices out across the board and let the chips fall where they may.

The dont have enough a bullets to kill the swelling masses on the newly destitute. For their sake the illusion must be preserved



That way a whole new wave of people could suddenly afford to actually buy a house {possibly outright} and the glut of houses would be gotten rid of a lot quicker.

They dont want you to "own" a house what they want you in is a soviet style tenement where are aspect of your life can be tracked and controlled


Which is what the market needs if anyone ever wants it to start recovering.

There is no "recovering" or "steering" the sheep to the slaughhouse killing bins





...........................

[Saul Mine]

So the price has dropped 25%. Big deal. Prices previously rose 100% so they would have to drop 50% just to be equal to what they were before the start of the bubble.

You know, if they could teach arithmetic in grade schools then everybody would understand how to juggle numbers like that. I mean if they could teach as if they knew what they were teaching. I promise you I didn't learn how to do that in public school. I learned it at home by myself, measuring boards with a ruler and figuring out where to put the nails. I was in 5th grade, and they don't try to teach fractions until 6th grade, and then they do it by showing the kids bits of colored paper. It's no wonder the poor kids never learn fractions very well. If they did they would not be such suckers when the government inflates prices by printing phony money.

[MNeagle]

Toll Brothers' Yearley Sees Land as `Gold' in Path to Profit

Douglas Yearley Jr., the first non- Toll brother to lead Toll Brothers Inc., has a plaque on his desk with a warning: “You can buy more land in an afternoon than you can get rid of in a lifetime.”

Yearley, 50, looks to balance that maxim with his desire to cut deals as he seeks to end three years of losses at the largest U.S. luxury-home builder. After becoming chief executive officer two months ago, he’s pressing on with a strategy to buy land at sunken values even as demand for new homes is sluggish.

“Our shareholders will be better served by this company growing through acquiring more land at today’s prices,” Yearley said during an Aug. 11 interview at his office in Horsham, Pennsylvania. “When you get it, it’s gold.”


more (http://www.bloomberg.com/news/2010-08-24/toll-brothers-yearley-sees-land-as-gold-in-homebuilder-s-path-to-profit.html)

[Joe King]

The loans that are made today are created out of thin air for the most part. The bank doesn't really loan you anything. The loan is fictitious, it takes them 30 seconds to juggle the zeros on the computer screen - but you have to work for 30 years to pay it off, not so fictitious on your part.

Anybody see something wrong with that picture?
To an extent, that is correct.
However, what they are actually doing is facilitating your access to "money" you haven't earned yet via fractional reserve lending.

Ever seen Wimpy in the Popeye cartoon? Why won't the guy let Wimpy pay tomorrow for a hamburger today?
Because he doesn't know if Wimpy is worth it or not. So along comes the banker who the guy knows is good for it as he has a vault full of "money". Surely he can be trusted to pay tomorrow for a hamburger today.
So the banker extends his credit to Wimpy for a price {interest} and Wimpy gets to eat today instead of waiting 'til after he's possibly earned some "money" in the future.
The guy selling hamburgers can then spend the bank credit on more hamburger meat.

Now the "money" is available in the market place for Wimpy to be able to earn back so that he may be able to re-pay the banker for having extended him credit yesterday.
Possibly by delivering hamburger meat, because due to bank credit they sold more than they otherwise would have. So now there's a new job opening at the butcher shop to deliver hamburger meat.

Now, times that by 300,000,000 people all using the next several decades worth of "future money" today, and we end up with all this stuff you see that's still all owed for.
Everything from the roads you drive on to the houses we sit in to the buildings we work in. {or outside of, as the case may sometiimes be}

So ultimately the loan is just as fictitious or not as your potential future earning ability is, or is not.


The big problem with a system like this is that it doesn't work in reverse.
And it goes into reverse when the collective future earning potential falls too much to support the borrowing of the past. Thats when it starts to sputter and die. Which exibits itself in things like lost jobs.

[etc]

That's what I said. That's what fractional reserve banking is. Creating FRNs and zeros out of nothing. They make no loans. There is no little bag with your name on it full of coin or FRNs or anything in the bank vault. It's pyramided on top of other deposits. So that much that only 10% of the loan is real and I doubt even that much is.

When this machine of credit-loan-generating collapses, we shall see prices truly collapse. It hasn't even started to unwind, just showing cracks in the wall.

Realize this process is inflationary... as these zeros didn't exist before you "bought" a home. You + the bank add that much liquidity to the process. That's why banksters sleep in fear that one day the people will realize what a fraud this is and start living with zero debt and avoid all these so called "loans", which are not loans at all.

I don't mind a true loan when real money exchanges hands. But not newly created FRNs.

Really, I would like to *buy* a house, but going to the bank so they can do their zeros shuffling does not constitute lending on their part nor buying on mine. Not if I have to work for the rest of my life for them. It's like a 30 year prison sentence.

[Joe King]

That's what I said. That's what fractional reserve banking is. Creating FRNs and zeros out of nothing. They make no loans. There is no little bag with your name on it full of coin or FRNs or anything in the bank vault. It's pyramided on top of other deposits. So that much that only 10% of the loan is real and I doubt even that much is.

When this machine of credit-loan-generating collapses, we shall see prices truly collapse. It hasn't even started to unwind, just showing cracks in the wall.

Realize this process is inflationary... as these zeros didn't exist before you "bought" a home. You + the bank add that much liquidity to the process. That's why banksters sleep in fear that one day the people will realize what a fraud this is and start living with zero debt and avoid all these so called "loans", which are not loans at all.

I don't mind a true loan when real money exchanges hands. But not newly created FRNs.

Really, I would like to *buy* a house, but going to the bank so they can do their zeros shuffling does not constitute lending on their part nor buying on mine. Not if I have to work for the rest of my life for them. It's like a 30 year prison sentence.


I agree wholeheartedly.
It's because the zombies all took the easy route of eat hamburgers today, pay for them tomorrow, and by default the rest of us got dragged along with them kicking and screaming all the way.
....and yea, the bankers ARE in fear that people will realize how it all works and opt for a debt free living.
But when that happens the system we've all known will fall to pieces and the ptb are standing ready to "flip the switch" to a new system that benefits them first, all over again.
They're just waiting for the rush to the exits to start.

Which is why we can't ever give up on trying to let others know how it all works, as when that failure inevitably comes we need enough people to say "no" to the next raping before it actually gets started.
As it is now, too many are still reliant upon the current model to be able to actively work for true change. The more that are aware of their own f'ing the better off we'll eventually be.

Critical juncture in time approaching, folks.
Don't waste it.

[Sparky]

What needs to happen is to just dump all the forclosures onto the market right now, bottom the prices out across the board and let the chips fall where they may.

That way a whole new wave of people could suddenly afford to actually buy a house {possibly outright} and the glut of houses would be gotten rid of a lot quicker.
Which is what the market needs if anyone ever wants it to start recovering.


Which is why alot of people aren't buying right now.
It's the old, "the other shoe hasn't dropped yet", syndrome.


Joe, you've hit the nail on the head. This is the long term solution.

Plenty of people want to buy a house. Just not at these prices.

[Phoenix]

Why <a href="http://en.wikipedia.org/wiki/Property_tax">rent from the government</a> when you can rent from a decent man or woman?

[Fortyone]

I want to buy a house I just don't want to have to finance it and since I don't have 100k sitting around that's a problem.

I could go FHA but I don't feel right about it but then again I wouldn't feel that bad about it either. If tshtf I don't think I would be worried about not technically owning my house either.

I'm still at a loss as to what to do.


Thats because real estate in your state is so overinflated its not even funny, even in rural areas. Although I have seen some nice fixer uppers in the West valley for under 40k.