Housing Market

[Gerry Clinchy]

Take heart ... your home is now worth as much as it was in ... 2003 ... just 9 years ago. I say that with tongue in cheek.

From RIS Media

Home Prices Rebound to 2003 Levels
By Zoe Eisenberg
More great market news came through yesterday: According to S&P/Case-Shiller, in July, the average home price rose to the same level as those seen during summer 2003, when the housing boom first started its journey toward the 2006 peak. While this may not signify that we are currently standing on the cusp of a market boom, it does show a significant turnaround, and perhaps hints at a definite end to real estate’s bleak streak. The recent S&P/Case-Shiller national home price index showed that in July, prices increased by 1.5 percent for the 10-City Composite and by 1.6 percent for the 20-City Composite.

While this study shows that prices are up 1.2%, that would mean about $2400 on a $200,000 home. Truthfully, that may not mean a whole lot, since selling prices or asking prices don't usually reveal "seller assist with closing costs" ... and we see a lot of that in our current market. People are still buying homes when they don't have enough $ to cover their closing costs (such things as title insurance, tax & insurance escrows, 1st year of HO insurance) Those costs run about 4-5% of purchase price (generally). So, someone buying on an FHA loan with 3.5% down will have a total outlay of about 7.5% to 8.5%.

It may very well be that the low interest rates are prodding people to buy now, even when they are short on cash up front.

[menmon]

The housing numbers were good yesterday along with consumer confidence....Romney may need to walk a narrow line on bashing the administrations economic policy.

[Gerry Clinchy]

Menmon, you call that good? Typically, here in my area, due to closing costs going in and coming out, to break even someone would need to have an 8% increase in home price when selling a home. In the "normal" market, in my area, that would have required staying in the house for 4 or 5 years. So, since 2003, 9 years, the home price might have typically increased about 10%, maybe a little more. Instead, it did not increase at all. The net result of the housing bubble. Duh?

Couple that with an 8.2% DECREASE in median income since Obama took office (#s just released), and I'd say that pretty much sucks for "the middle class". Couple that with the increase in the cost of energy and food (NOT included in the COL index) and you've got a LOT of people who are hurtin' ... even if they are fortunate enough to have a job.

You mentioned you are in TX ... one state that has survived the economic downturn better than most. You may not have the best perspective on what is happening in other parts of the country.

[menmon]

You are right...things are better in Texas. Obama did not cause this so using him as an escapegoat is chicken crap.

The point is housing has bottemed out and in some parts of the country values are going up notably. That's a good thing. Initiatives that were done to reduce inventory you can credit to Obama, but he couldn't snap his fingers and do away with the excessive inventroy...that takes time and time is working, and has supply gets less than demand values will go up.

In houston, you never see any real appreciation in a home, because it is to easy to get new ones.

[Franco]

You are right...things are better in Texas. Obama did not cause this so using him as an escapegoat is chicken crap.

The point is housing has bottemed out and in some parts of the country values are going up notably. That's a good thing. Initiatives that were done to reduce inventory you can credit to Obama, but he couldn't snap his fingers and do away with the excessive inventroy...that takes time and time is working, and has supply gets less than demand values will go up.

In houston, you never see any real appreciation in a home, because it is to easy to get new ones.

That is generally true of homes built in subdivisons. Homes built on acrage with trees outpace the market because they appeal to people with money/higher income compared to those built in most subdivisions.

I am getting ready to sell a rental duplex that I purchased in 07 for 30% more than what I paid. Its value went up because it is adjacent to a much newer area that has developed with homes in the 300,000 plus range. Location much more so than the economy determines home values.

Also, don't forget that with QEIII, the Fed is in effect buying bad home loans vis bonds. This practice will only prolong the housing crisis in the areas that have a problem with housing. Had the Free Market allowed to work its magic, there would have been no housing crisis. The increased burden is now placed on tax payers.

[v ricci]

don't forget the "obamacare" tax when you sell your home...
just sayin

[menmon]

That is generally true of homes built in subdivisons. Homes built on acrage with trees outpace the market because they appeal to people with money/higher income compared to those built in most subdivisions.

I am getting ready to sell a rental duplex that I purchased in 07 for 30% more than what I paid. Its value went up because it is adjacent to a much newer area that has developed with homes in the 300,000 plus range. Location much more so than the economy determines home values.

Also, don't forget that with QEIII, the Fed is in effect buying bad home loans vis bonds. This practice will only prolong the housing crisis in the areas that have a problem with housing. Had the Free Market allowed to work its magic, there would have been no housing crisis. The increased burden is now placed on tax payers.

There is truth in that but I'm for helping the inocent victims that the financial crisis hurt as oppose to letting the beneficiaries of the financial crisis benefit again on someone's bad forturne. Its the right thing to do. Making the most money is not always the best way. Got to be able to look at yourself in the mornings..you agree?

[coachmo]

You can't actually believe the economy policy of the current administration is making things better. Really?

[gmhr1]

Median household income is down 8% since Obama took office glad someone can buy a home

[Franco]

There is truth in that but I'm for helping the inocent victims that the financial crisis hurt as oppose to letting the beneficiaries of the financial crisis benefit again on someone's bad forturne. Its the right thing to do. Making the most money is not always the best way. Got to be able to look at yourself in the mornings..you agree?

I don't feel sorry for the banks, especially the ones that got bailed out. I also don't feel sorry for the folks that bought more house than the could afford. Whatever happen to living below one's means in order to have a cushion or rainey day fund? Poor fiscal practices and stupid decisons should not be rewarded. There was plenty of available and affordable housing, yet too many choose to be irresponsible in the homes they bought. Now they pay the price for those greedy decisions.

People need to understand that life is not fair and only the frugel will inherit the earth! Nor is it fair to expect tax payers to bail out banks and people who live beyond their means. People lose jobs all the time and that should be a consideration with anyone making a large purchase be it a home or vehicle. Nothing wrong with people being prepared for the worse life can deal them.

This may seem harsh to many but the reality is; work and savings is what built this country and not a big nanny state.

Self reliance is the Libertarian way!

Both Dems and Repubs policy is to punish those that save money through their unwavering support of the Fed and its artifically low interest rates.