Another Drop in Home Prices

[mjmjpfaff]

http://www.zerohedge.com/news/median-us-new-home-price-has-biggest-3-month-drop-ever
This isn't the best news I have seen all day... 🙁
How in the hell are we going to get out of this mess?

 

[jsc]

$210k to $205k is not a "tumble".

That chart is misleading. The baseline is $180k, not $0.

 

[JAYDEEJOHN]

When the housing crisis happened, the thought was, no inflation til it all cleared up
Well, its been 4 years, and it hasnt, it was supposed to two years ago, and is why we see them dropping in price
As we print more money, everything devalued, starting with housing in its current weak condition, as the government plans to run inflation next year

 

[Reynod]

Prices in my suburb have dropped a bit too.

It isn't just the US ... we are struggling with mortgages here too.

My work is tied to the Construction industry as I manage apprentice training ... so it is a concern.

http://reiwa.com.au/Research/Pages/Suburb-profile-results.aspx?suburb_id=2847&census_code=SSC53081&geogroup_id=2450&geogroup_parent_id=3

We are likely (finally) to get some interest cuts here shortly ... our reserve bank has stalled cuts for some time now ... hammering the very people who have the ability to kickstart the economy.

No inflation ... no housing growth ... no economic growth ... higher unemployment.

All gloom and doom.

Still ... I suppose I could sell up and buy a cheaper house or two overseas?

 

[riser]

A few years ago Detroit was selling entire neighborhoods for US$10,000. They ended up bulldozing several because of the lack of buyers.

I have a few friends who bought half million dollar homes - considering the cost of living in the area is cheap, that's a lot of house, for under $100k. The catch being that you need to have a job.

I've since relocated out of the area into an even lower cost of living area. Property taxes are a lot cheaper and there are less houses on the market since things are affordable.

 

[Mutt x]

I think our entire economy is based on consumerism and debt fuels it. Its a shell game since our currency has no basis of absolute value. Ever notice how nervous all the people on TV get when people stop spending money?

I don't worry about the "value" of my home but I am fortunate that I can afford to pay twice that value over 20 years---called a mortgage. Some people can't and get forclosed on but that's not what the banks want. They want people to pay them to use their money forever.

Also, dropping house prices hurt those who need to sell (ie for job changes). This opportunity to buy property for less is available to people with the resoures and guts to take it.

Don't worry unless you can't make your payments or you have to sell because inflation will eventually drive up the "value" of your home. Thats the way the financial system wants it. Inflation hurts people most whose money is out of the economy.

Hold out then you can borrow money from them on other properties that have risen in "value" which they will allow you to use for the same price as the house you "buy."

Bob Kiyosaki teaches: A liability is anything that you have which costs you money to own. Only things which earn you money are assets. Therfore, your house is a liability.