News from the housing front indicates that house prices are rising.
This sounds like good news for home sellers and bad news for home buyers.
It looks like good news for home owners, except for property taxes. But when you are self-deluded, you regard your home as your number one investment. It isn’t. It’s an expense.
If it were an investment property generating rental income, OK. But it isn’t.
How good is the good news? Are you a buyer? Bad.
How accurate is it? Bad. That’s good news for buyers. There is still light at the end of the tunnel. There is still a silver lining.
It’s going to rain on sellers.
The Case-Shiller index for housing prices in 20 U.S. cities saw home prices up on average 2.3% in June.
June is the beginning of the buying season. The index is for 3 months.
The National Association of Realtors says that home sales were up in July over 9%, year to year.
Case-Shiller was up from May 2009 to May 2010, but then it reversed. That’s because the tax subsidy ended: the First-Time Homebuyers Tax Credit.
As the financial markets insider blog ZeroHedge has pointed out, the robo-signing scandal that broke in late-2010 slowed the pace of foreclosure activity by roughly a third. RealtyTrac data suggests a 1.6 million home foreclosure backlog at present. Add this to the roughly 2 million foreclosures currently in progress, according to Barclay’s Capital research, the 1.5 million to 4 million homes that are at least three months behind on their payments, and the 10 million mortgages that remain underwater and candidates for defaulting down the road, and you get headwinds of several different storms coming together to create a potential foreclosure hurricane headed right for the shores of today’s supposedly bottoming out housing market.
Is unemployment falling? No. Then how will first-time buyers buy? They won’t. Then how will people in underwater homes get on top of the water? They won’t.
In 2011, 27% of the sales were to investors. Will they sell? I doubt it. Why should they? They are generating positive cash flow. As people get evicted, they must rent.
Will mortgage rates stay under 3.6% indefinitely? No.
Is it time to start shopping for an investment house? Yes. But read John Schaub’s books first: www.JohnSchaub.com.
America will become sane after the last baby boomer dies. Everything should not be about profit at your neighbors expense. Greedy selfish generation. You smoked your dope and had your orgies. Now you want Us, the younger genertion to make up the difference in your mortgage shortage and your healthcare. PLEASE!
It's not that they are greedy. It's that they opted for instant gratification, delayed the inevitable payday, and are now bankrupting the government.
Not all of us Baby Boomers were self-centered, partying, dope-smoking, pro-abortion hippies… but the culture change for the worst did start in the 1960s and "square" kids like me couldn't stop it. Here's an example: Until I was in sixth grade, girls wore dresses to school and were proud to do so; in seventh grade, girls could wear long pants – still dressing nicely (Twiggy was the fashion model of the time); but by ninth grade, out came the vulgar hot-pants and low-cut tops, allowed at public school! Not every girl dressed trashy but the "gimme, gimme, gimme, anything goes" attitude stuck ever since. Drug addiction, abortion, etc. on a large scale were a direct result. Somebody has to pay for the costly lifestyle mistakes – guess what, it's the taxpayer, the forgotten man.
Well said, guest. I was another "late" boomer (born in '58) who didn't do drugs, sleep around, etc. (my parents actually made me go to church every Sunday, no matter how late I got in Saturday night/Sunday morning!). Many of us boomers want out of this mess – I don't beleive I'll ever collect any Social Security – it will be gone by the time I can retire (around 70 or 75 maybe?). I'm driving a 15 year old Bonneville that I paid $1500 for last year because I'm keeping my expenses as low as possible while I put my kids through college. So some of us boomers are delaying gratification and doing the right thing/s.
What does this article have to do with baby boomers? It's about the housing market and how the economy affects it. Statements like, "America will become sane after the last baby boomer dies" make no sense in any context. Is the European Union "insane" as well?
Do you think that no "boomers" paid into this system? I was born in 1947, joined the military to fight a useless and wasteful war in 1965, worked and saved my whole life, started my own small business and paid into the system only to discover that all the funds were used by politicians for anything and everything that they could think of. I still have my own savings and paid off property . . . for the time being. Greedy, selfish baby boomers smoking dope did not bankrupt this country and if you haven't figured that out by now then your humble, generous, enlightened generation will do no better. The social problems in this country are nothing compared to the political problems. As long as the market is manipulated through interest rates and an inreasing money supply nothing will improve. Concentrate on changing that instead of waiting for certain people to die. PLEASE!