Is This the Beginning of the End?

[admin]

Resale home sales came in at 6.18M:

http://news.yahoo.com/s/ap/20061025/ap_on_bi_ge/economy_2

Analysts were expecting 6.20-6.35M:

http://www.marketwatch.com/news/economy/economic_calendar.asp?siteId=

http://biz.yahoo.com/c/e.html

Median price dropped, year-over-year, 2.5%.

Will Friday be the straw that breaks the camel's back?

Dr. Roubini still predicts GDP growth of only 1.0-1.5%:

http://www.rgemonitor.com/blog/roubini/153716

Wall Street is expecting Q3 GDP to come in at 2.0-2.2% growth:

http://www.marketwatch.com/news/economy/economic_calendar.asp?siteId=

http://biz.yahoo.com/c/e.html

If GDP growth comes in below 2.0%, will that, combined with the continuing soft housing data (tomorrow's release of new home sales data should be interesting), finally awaken investors and start the market down?

[Carlsbadliving]

“The worst is behind us as far as a market correction – this is likely the trough for sales,” said David Lereah, the Realtors’ chief economist.

David says everything is fine. I’m not worried at all.

[LA_Renter]

Man, I’m glad David spoke up. I was getting a little worried there.

[LookoutBelow]

Lereah is a complete simpleton……could his ridiculous cheerleading be any more blatant ?

[Mexico Resident]

He’s just doing his job. I don’t see any law being broken. On the other hand, the news media sure is slow to ask for supporting analysis.

[powayseller]

If you check with the Chamber of Commerce, we have a housing shortage; we’ve underbuilt by 1 million homes in the last 10 years in California. According to Sherm Harmer of Urban Housing Partners, “Many media sources and feature writers would like the public to believe a huge real estate bubble is forming and that the sky is falling in the residential real estate market. Headlines and stories have been reported that sales are down and prices are falling. It is amazing how sales have slowed in direct proportion to the amount of negative press that has been generated.” He goes on to say that the bubble is a fiction in the mind of the media. Then, get this: “…this year, San Diego County will create close to 20,000 new jobs, generating demand for more than 14,000 homes. Based on current projections, the county will issue fewer than 9,000 permits – another year of underbuilding>”

Ok, let me get this straight: we’ve been losing population of 15K, 25K, and 43K people in each of the last 3 years, and population actually declined last year by .2%, but he thinks we have a housing shortage? We have a shortage of affordable housing, not a housing shortage.

jg, did you read in the CNN story, a quote from one of the NAR spinmeisters that inventory is leveling off? They forgot to say that inventory always falls in the winter, and so do sales.

[poorgradstudent]

Mr. Harmer needs to look up the meaning of “Cause and Effect”

The media really started reporting once the sales started slowing.

[kev374]

there is plenty of land here in South Orange County. Drive through Sand Canyon in Irvine and you’ll see nothing but empty land adjacent to upcoming construction. Every street corner I drive through has some sort of condo construction project going on. The oversupply is just ridiculous! All these ridiculously priced condos will not have any buyers at all!

[VanMorrisonFan]

How I wish that media spin-meisters (especially those who are bullish on housing in this market) would take a basic class in economics.

Demand and supply are always related to price. Yes, there is a shortage of housing. No, there is no shortage of two bedroom condos in the $400K – $500K range, especially in Orange County.

If anything, the demand for low-cost housing will create downward pressure on homes, at least those that are unaffordable (by definition, most homes on the market).

[PerryChase]

If our political leaders and Chamber of Commerce are really serious about affordable housing, they should encourage (by supporting more lenient permitting and taxation) even more building as the market crashes. That will create more affordable housing for the general population.

How about making the housing industrial complex the sacrificial lamb for the benefit of all? That would be a really bold move for once. Since I own real estate, I’m not just being partisan.

[Anonymous]

Today was a signal example of why I cannot make money shorting: I would have bet decent money that the market would have moved down given that resale home sales came in below forecast.

Lucky for me, I’ve known forever that I cannot predict short-term market movements, and have stayed away from that ‘game.’ May all of you ‘short folks’ make a mint on your bets!

[Author]

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