Housing Market Will Extend Recession

Discussion in 'Economy' started by auditor0007, Feb 8, 2009.

  1. auditor0007
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    auditor0007 Gold Member

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    With all of the problems we are seeing with the economy, no one wants to mention the obvious. While the glut of houses continues to increase in the housing market, everyone is blaming the credit crunch. While the credit crunch is creating a problem for some people, the simple fact is that we have too many houses.

    We built more houses/apartments/condos than we need. Even with home prices having dropped significantly, there are no new buyers, and there aren't likely to be that many anytime soon. Even foreclosed homes that can be purchased at bargain basement prices are not moving. On the flipside, rental properties are also seeing an increase in their vacancy rate. People need somewhere to live, and apparently most people do have a place to live currently, yet the overall vacancy rate is increasing. This spells a much longer term problem than anyone is telling us.

    With such a glut of homes available, it will be a long time before there is a need for new housing, which means homebuilders won't be hiring anytime soon. Homebuilding is one of the foundations of our economy. When new homes aren't being built, it's bad news for the economy.

    What we need are more people and more immigration, although it needs to be people who can actually afford to buy homes. Oh yea, that brings to mind another issue. If we want to deport 12 million illegal aliens, we're going to create an even bigger glut in the housing market, driving prices even lower. Something tells me it might be a good idea to put the illegal immigration issue on the backburner. Actually, I never really expected to see too many deportations.

    Anyway, that's how I see things, and I believe this housing glut is going to keep our economy from taking off anytime soon.
     
  2. wimpy77
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    wimpy77 Member

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    that's why jim cramer suggested giving people a $15,000 to $20,000 dollar tax credit for buying existing foreclosed homes only. what ended up being put in the senate bill was giving a $15,000 credit new and existing homes. but over the last two months, existing house sales have increased with the prices of homes going down.
     
  3. RodISHI
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    RodISHI Gold Member

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    The housing market has been way over inflated in many places. People cannot afford to pay half their income or even more in many cases for a house, apartment or condo.
     
  4. auditor0007
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    auditor0007 Gold Member

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    You're missing my point. Now, I could be wrong, but based on the numbers, we aren't going to have enough buyers regardless of what type of incentives the government might give, because there are more homes available than are needed.
     
  5. indago
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    indago VIP Member

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    Try to follow along with this:

    The consumer doesn't have a job: it has been shipped to a foreign country where standards are much lower, or an illegal alien is doing his job with a stolen identity. The consumer not having a job, he has no money to spend. Having no money to spend, he can't pay his mortgage or support his family. No amount of government intervention into the banking systems, car companies, insurance companies, will help the economy if the consumer has no job with which to make money to spend. He is just not buying anything.
     
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  6. editec
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    editec Mr. Forgot-it-All

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    You don't suppose that the demand might be down because people cannot borrow money from the banks, do you?
     
  7. auditor0007
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    auditor0007 Gold Member

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    That is only a small fraction of the overall problem. The fact is that for most of this decade, until the beginning of the housing market meltdown, speculators were responsible for the purchase of nearly 25% of all home sales. This created a massive excess of homes which has now been added to by all of the foreclosures. The point is that there are not enough people to buy all of these homes even if everyone was working.

    The following article was written in 2005 and discusses this problem even at that time.

    "If housing speculators stop buying, who's left to buy? The average American with a job has already bought. America has been creating new homes faster than new jobs, and it has been the home speculator, and second home investor, holding up the market for at least the past year. (The latest reports show that the time it takes to sell a home has increased, and price rises have been trailing off.)"

    Safe Haven | Slaughter of the Housing Speculators
     
  8. Truthmatters
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    Truthmatters BANNED

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  9. auditor0007
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    auditor0007 Gold Member

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    Yea, like a wow dude. Those are new housing inventory levels dude, and they don't take into account the glut that has been added from foreclosures dude. I would imagine new housing inventory levels would have reduced in the last couple of years dude, because we haven't been building any new homes dude. You're a damn genius dude.
     
  10. Truthmatters
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    Truthmatters BANNED

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    They are inventory levels DUDE!

    They are the same numbers used in every year.

    When people have an economy that is not falling off a cliff they will move out of their Sisters, Mothers , brothers, friends, Dads, Uncles , Aunts, Sons ,Daughters, Inlaws house and be able to rent or buy one of these houses.

    It is a standard measure and you are wrong, please dont cry.....Dude.
     

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