Listen to the archive of Greg on WIBC, Indianapolis from 2/25.
There's been a Rod Serling sighting.
At some point it just gets off the wall silly. It would be funny if it weren't about such incredibly large sums of cash and disappearing equity. Every month feels like the last when the new housing numbers come out. More bad news. Little to be optimistic about. It certainly feels surrreal, like we've entered into our own 'Twilight Zone.'
The newest report on housing has prices of U.S. single-family homes plunging 18.5 percent in December from a year earlier as the monthly pace accelerated, according to a Standard & Poor's/Case-Shiller home price index on Tuesday. The S&P/Case Shiller composite index of 20 metropolitan areas fell 2.5 percent in December from November, compared with a 2.3 percent decline in the previous period, S&P said in a statement. "There are very few, if any, pockets of turnaround that one can see in the data," David Blitzer, chairman of S&P's index committee, said in the statement. "Most of the nation appears to remain on a downward path." In a separate index, home prices depreciated at a 18.2 percent pace in the fourth quarter from a year earlier, for the largest drop since the series began 21 years ago, it said. From the housing market peak in the second quarter of 2006, home prices have plummeted 26.7 percent, it said.
As for the Stimulus, don't count on that making a difference. While there was an $8000 tax credit for 1st time home buyers, the reality is congress, in all it's brilliance, totally stripped out the $15,000 tax credit that would have applied to ALL home buyers. That would have made a difference. The first time home buyer's credit, while nice, will have little effect on the overall market. So much for fixing housing first. If it's true that housing leads us into recessions and out of those same recessions, we're still waiting for the residential General to start marching back up the hill. Right now he's no where in sight.
So once again class, what does it all mean? As I've said on the radio a thousand times, it remains a great time to buy with incredible interest rates available for many home buyers. In five years you will look back and feel you've made one of the best investments of your life. Not in two years, five.
As for home sellers, lower your expectations, your prices and your uside down statues into the ground because sports fans, you're going to need all the help you can get. It is the most challenging time to sell a home since the mid 1960's. Not even the early 80's were this bad. Sure we had high interest rates but we didn't have the bank failures and the numerous other factors working against us.
Now we have excessive inventory, foreclosures, unemployment, etc., all affecting housing. There's also the inflation monster which will be sure to rear it's ugly head in the coming few years. If you can survive the moat full of monsters to buy a home right now, you may just see 2015 arrive with a pile of equity in your property. Be warned, getting there will be tough. If you look closely, you may even see Mr. Serling along the way.