New-home sales plunge 33% to record low in May

[Coronita]

[quote=Allan from Fallbrook][quote=outtamojo]

I would add that whoever can also circulate the most money wins – that way you can confiscate the wealth of the world and not just your own citizens.[/quote]

Outtamojo: That’s a very good point, too, and there are parallels here with the 1930s, mainly having to do with a hoarding mentality when it came to monetary circulation.

One of the major arguments against the stimulus has been the perception that little, if any, money is really circulating. Keeping in mind that most of the stimulus money still has to be spent undermines this somewhat, but perception is the editor of reality (which also harkens back to the 1930s and FDR’s “Fear itself” speech, which was designed to boost confidence and consumer spending and bank lending).[/quote]

You think it’s working? It’s a serious question. Do you think folks are feeling more confident these days?

[SK in CV]

[quote=flu]I never thought that a tax credit would have generatde so much demand…Boy was I wrong about that.[/quote]

As a practical matter, it didn’t. New home sales, even during the end of the tax credit period were dismal, still significantly lower (in number of units sold) than any time in the last 60 years, save for a handful of months. (Note, thats months, not years. A handful of months out of the last 720 months, probably longer.)

The market hasn’t responded sharply because it’s not news.

New home sales won’t move much until there is demand. There won’t be demand until there is a shortage of resale homes. Seems unlikely that will be any time soon, in most markets.

It’s all part of the puzzle. Working backwards here, there can’t (or won’t) be inflation unless there is a robust recovery, which probably can’t happen unless there is very healthy job creation. As a practical matter, there can’t be healthy job creation until there is an increase in new home construction spending. From that point backwards, see above.

[SK in CV]

[quote=flu]I never thought that a tax credit would have generatde so much demand…Boy was I wrong about that.[/quote]

As a practical matter, it didn’t. New home sales, even during the end of the tax credit period were dismal, still significantly lower (in number of units sold) than any time in the last 60 years, save for a handful of months. (Note, thats months, not years. A handful of months out of the last 720 months, probably longer.)

The market hasn’t responded sharply because it’s not news.

New home sales won’t move much until there is demand. There won’t be demand until there is a shortage of resale homes. Seems unlikely that will be any time soon, in most markets.

It’s all part of the puzzle. Working backwards here, there can’t (or won’t) be inflation unless there is a robust recovery, which probably can’t happen unless there is very healthy job creation. As a practical matter, there can’t be healthy job creation until there is an increase in new home construction spending. From that point backwards, see above.

[SK in CV]

[quote=flu]I never thought that a tax credit would have generatde so much demand…Boy was I wrong about that.[/quote]

As a practical matter, it didn’t. New home sales, even during the end of the tax credit period were dismal, still significantly lower (in number of units sold) than any time in the last 60 years, save for a handful of months. (Note, thats months, not years. A handful of months out of the last 720 months, probably longer.)

The market hasn’t responded sharply because it’s not news.

New home sales won’t move much until there is demand. There won’t be demand until there is a shortage of resale homes. Seems unlikely that will be any time soon, in most markets.

It’s all part of the puzzle. Working backwards here, there can’t (or won’t) be inflation unless there is a robust recovery, which probably can’t happen unless there is very healthy job creation. As a practical matter, there can’t be healthy job creation until there is an increase in new home construction spending. From that point backwards, see above.

[SK in CV]

[quote=flu]I never thought that a tax credit would have generatde so much demand…Boy was I wrong about that.[/quote]

As a practical matter, it didn’t. New home sales, even during the end of the tax credit period were dismal, still significantly lower (in number of units sold) than any time in the last 60 years, save for a handful of months. (Note, thats months, not years. A handful of months out of the last 720 months, probably longer.)

The market hasn’t responded sharply because it’s not news.

New home sales won’t move much until there is demand. There won’t be demand until there is a shortage of resale homes. Seems unlikely that will be any time soon, in most markets.

It’s all part of the puzzle. Working backwards here, there can’t (or won’t) be inflation unless there is a robust recovery, which probably can’t happen unless there is very healthy job creation. As a practical matter, there can’t be healthy job creation until there is an increase in new home construction spending. From that point backwards, see above.

[SK in CV]

[quote=flu]I never thought that a tax credit would have generatde so much demand…Boy was I wrong about that.[/quote]

As a practical matter, it didn’t. New home sales, even during the end of the tax credit period were dismal, still significantly lower (in number of units sold) than any time in the last 60 years, save for a handful of months. (Note, thats months, not years. A handful of months out of the last 720 months, probably longer.)

The market hasn’t responded sharply because it’s not news.

New home sales won’t move much until there is demand. There won’t be demand until there is a shortage of resale homes. Seems unlikely that will be any time soon, in most markets.

It’s all part of the puzzle. Working backwards here, there can’t (or won’t) be inflation unless there is a robust recovery, which probably can’t happen unless there is very healthy job creation. As a practical matter, there can’t be healthy job creation until there is an increase in new home construction spending. From that point backwards, see above.

[Nor-LA-SD-guy]

Yep I think we did it,

We managed to create a positive feedback loop (with undesirable results).

Foreclosures leading to rent free living leading to strategic defaults leading to increased loan requirements leading to less qualified buyers, leading to more unemployment leading to more foreclosures etc….

[Nor-LA-SD-guy]

Yep I think we did it,

We managed to create a positive feedback loop (with undesirable results).

Foreclosures leading to rent free living leading to strategic defaults leading to increased loan requirements leading to less qualified buyers, leading to more unemployment leading to more foreclosures etc….

[Nor-LA-SD-guy]

Yep I think we did it,

We managed to create a positive feedback loop (with undesirable results).

Foreclosures leading to rent free living leading to strategic defaults leading to increased loan requirements leading to less qualified buyers, leading to more unemployment leading to more foreclosures etc….

[Nor-LA-SD-guy]

Yep I think we did it,

We managed to create a positive feedback loop (with undesirable results).

Foreclosures leading to rent free living leading to strategic defaults leading to increased loan requirements leading to less qualified buyers, leading to more unemployment leading to more foreclosures etc….

[Nor-LA-SD-guy]

Yep I think we did it,

We managed to create a positive feedback loop (with undesirable results).

Foreclosures leading to rent free living leading to strategic defaults leading to increased loan requirements leading to less qualified buyers, leading to more unemployment leading to more foreclosures etc….

[Diego Mamani]

[quote=flu]I never thought that a tax credit would have generatde so much demand…Boy was I wrong about that.[/quote]

I think that the tax credit didn’t so much create demand, as tranfer it from the future to the present. That is, people who would have bought in late Spring, Summer, Fall, 2011, etc., rushed to buy by April 2010.

The other thing this $%$#@% tax credit accomplished was to transfer $8,000 per transaction from taxpayers to real estate sellers.

[Diego Mamani]

[quote=flu]I never thought that a tax credit would have generatde so much demand…Boy was I wrong about that.[/quote]

I think that the tax credit didn’t so much create demand, as tranfer it from the future to the present. That is, people who would have bought in late Spring, Summer, Fall, 2011, etc., rushed to buy by April 2010.

The other thing this $%$#@% tax credit accomplished was to transfer $8,000 per transaction from taxpayers to real estate sellers.

[Diego Mamani]

[quote=flu]I never thought that a tax credit would have generatde so much demand…Boy was I wrong about that.[/quote]

I think that the tax credit didn’t so much create demand, as tranfer it from the future to the present. That is, people who would have bought in late Spring, Summer, Fall, 2011, etc., rushed to buy by April 2010.

The other thing this $%$#@% tax credit accomplished was to transfer $8,000 per transaction from taxpayers to real estate sellers.

[Diego Mamani]

[quote=flu]I never thought that a tax credit would have generatde so much demand…Boy was I wrong about that.[/quote]

I think that the tax credit didn’t so much create demand, as tranfer it from the future to the present. That is, people who would have bought in late Spring, Summer, Fall, 2011, etc., rushed to buy by April 2010.

The other thing this $%$#@% tax credit accomplished was to transfer $8,000 per transaction from taxpayers to real estate sellers.

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