Dow tops 9,000 as home sales rise for 3rd month

[txbadger]

I
d suggest a peek at the past, say 1930-1933, before getting all giddy over Dow 9k. The underlying data shows earnings above expectation with revenues below prior quarters on a reduced workforce, pointing the way to a new business model There is still no accounting for the toxic debt We the People have guaranteed & waiving the mark to market rules, again, just postpones the eventual destruction of that toxic debt and final accounting. Guaranteeing an estimate 24 Trillion in bad debt doesn't seem to be a good thing to me.

[K G]

I'd suggest a peek at the past, say 1930-1933, before getting all giddy over Dow 9k. The underlying data shows earnings above expectation with revenues below prior quarters on a reduced workforce, pointing the way to a new business model There is still no accounting for the toxic debt We the People have guaranteed & waiving the mark to market rules, again, just postpones the eventual destruction of that toxic debt and final accounting. Guaranteeing an estimate 24 Trillion in bad debt doesn't seem to be a good thing to me.

C'mon....the Obama-ites are gonna look for ANYTHING good happening with the economy that they can say he was responsible for as his ratings continue to plummet. Nevermind the pesky details, txbadger....

I'm just glad he's changed his focus to where his REAL qualifications lie: second-guessing law enforcement during a nationally televised "press conference"....

kg

[tpaschal30]

We may make it if HC and Cap and Tax do not pass. We will have massive inflation, but we will make it. Passing a tax increase of either kind (cap and trade or HC) will have the same effect as restricting the money supply. That was the mistake made in the 1930s that turned a recession into depression.

then get rid of the dems in 2010 paralyzing the Mesiah and kick his Jimmy Carter rear end out.

[code3retrievers]

Its called a bottom!

After several years of a down turn we were about to hit it no matter what idiot is president.

Your savior did nothing to help this correction but his spending us into the abyss will be felt for generations. Thank you!

[Lisa Van Loo]

what I asked was why an increase in home sales is necessarily good for the economy if the homes that are selling are selling for 40-60%+ less than a couple of years ago. I ask a serious question, because some people are doing well buying the greatly reduced homes, but many are also taking a huge financial hit to the point of being ruined.

This is a really good, core question. Put a different perspective on it, and those who are taking a bath right now may have bought more house than they truly could afford, and/or paid more than their properties were actually worth (but high, sell low is never a good strategy).

The way I look at it is, 3-4 years ago, Labtradoodle pups were selling for $2000-3000 bucks a pop at 7 weeks, with waiting lists. Now, if I even see an ad for pups in my region, they are selling for a couple hundred bucks, and people struggle to get rid of them. It's speculation; buying high with the expectation that the bubble will continue, and it will sell for more than what one paid for it; that almost never continues for long. Price based on demand, rather than actual value almost always shows these huge pendulum swings. When prices normalize to actual value (give those Labradoodles away before they eat you out of house and home), someone is always going to take a bath.

Lisa

[YardleyLabs]

The good news is that new home sales are up 11% and existing home sales have increased in each of the last three months. The bad news is that prices are down and a high percentage of sales are foreclosure sales. A plus is that these sales are reducing inventory. As inventory reaches more normal levels, prices may stabilize and begin increasing. However, I suspect that the Nasdaq may approach Clinton levels before home prices return to Bush prices.

[badbullgator]

The good news is that new home sales are up 11% and existing home sales have increased in each of the last three months. The bad news is that prices are down and a high percentage of sales are foreclosure sales. A plus is that these sales are reducing inventory. As inventory reaches more normal levels, prices may stabilize and begin increasing. However, I suspect that the Nasdaq may approach Clinton levels before home prices return to Bush prices.

My problem with that Jeff, is that MOST of the houses being bought, at least in my area, are not primary residences. This means they will do little to clear the existing market, because while they are not on the market right now most are holding them as a investment until prices come back up. When prices do rise there will once again be a huge inventory of houses on the market

[YardleyLabs]

My problem with that Jeff, is that MOST of the houses being bought, at least in my area, are not primary residences. This means they will do little to clear the existing market, because while they are not on the market right now most are holding them as a investment until prices come back up. When prices do rise there will once again be a huge inventory of houses on the market

Interesting. I wonder if that is regional or national. It certainly seems like a good time for RE speculators to step in since normal buyers are still having problems obtaining financing.

[badbullgator]

I can’t back it with anything, but recently there was an auction and they said on the news that 80% were paid for with cash rather than financing. I know a couple of people that have bought 200K+ condos for 50-80K and paid cash as an investment. We have a large house inventory here but an even larger condo inventory. If you drive by any of the what seems like hundreds of new condo properties at night you can see that well over half of them are all empty. I often asked when the building boom was going on “who is going to live in all these condos?”

[Goose]

Don't start singing 'Happy Days Are Here Again'. New home sales for June 2009 were the second worst on record for any June since 1963. Shiller says "homeowners are still delusional in their thinking that the housing market will recover" and "now is not the time to buy a single family home".

U3 unemployment is currently around 9.5%. Roubini has it going to 11% and Whitney has it going all the way to 13%!! If Whitney's right with her prediction of 13% unemployment then housing still has a ways to go before bottom.

Remember...structured finance is DEAD. We will never see another housing bubble.