Did Existing home sales actually go up 10% last month?

Discussion in 'Economy' started by Neubarth, Nov 24, 2009.

  1. Neubarth
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    Neubarth At the Ballpark July 30th

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    Washington in their effort to get people to think that the Depression is lifting issued news releases that loudly proclaimed that Existing Home sales soared ten percent in October.

    That was not true, as are most of the news releases since Obama took office. Auctions of foreclosed houses were fifteen percent of existing home sales. Add to that the fact that most of those auctioned houses were sold immediately for a quick twelve to fourteen percent gain. That double sale was thirty percent of the Existing home sales. If you just take the bank auctioned sales out, sales fell five percent. If you take the resale of the auctioned homes, sales fell twenty percent. We are in a sheetload of trouble in this country as the Depression widens daily.
     
  2. alan1
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    alan1 USMB Mod Staff Member Supporting Member

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    I'm curious, I wonder how many of those bank foreclosure sales were done at a loss?
    The bank is better off selling a $200,000 house for $180,000 than to not sell it all.
     
  3. Neubarth
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    Neubarth At the Ballpark July 30th

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    The banks usually take a considerable loss when the home is sold at auction. Forty percent is not uncommon.
     
  4. Toro
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    Toro Diamond Member

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    Link?
     
  5. Neubarth
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    Neubarth At the Ballpark July 30th

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    You should really pay more attention to the news.

    Tax credits fuel 10 percent surge in US home sales

    By Rob Lever (AFP) – 1 day ago

    WASHINGTON — A rush to cash in tax incentives helped boost sales of existing US homes 10.1 percent in October, according to data Monday showing fresh momentum for the sector at the heart of the economic crisis.

    The National Association of Realtors said sales of existing single-family homes and apartments rose to a seasonally adjusted annual pace of 6.10 million units, well ahead of market expectations of 5.7 million.
    AFP: Tax credits fuel 10 percent surge in US home sales
     
  6. Neubarth
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    Neubarth At the Ballpark July 30th

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  7. Toro
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    Toro Diamond Member

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    Rithholz's logic is somewhat flawed.

    First, of course seasonality matters. That's why we adjust for seasonality.

    Second, of course it is the worst states that are seeing the biggest bounces. That is to be expected. That always happens off bottoms, no matter what the asset - homes, stocks, bonds, etc.

    Third, there are a number of metrics showing home prices are now cheap.

    The housing market has probably hit bottom but I do agree that it is likely to move sideways for some time to come.

    I'd like to see the link for the OP so I can see the data or at least the argument.
     
  8. Neubarth
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    Neubarth At the Ballpark July 30th

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    Toro, you are too much of an optimist. Bottom will be when the house cost crosses below replacement value. My house still has another fifty percent to go, and I am in San Diego. It just appraised for half a million (8 bedrooms because I raised over thirty children). I could have it built for half that or less. *AND it would be in better shape than my house presently as it has endured the wear and tear of all those children. I could have sold it four years ago for $800,000. Wish that I had.
     

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