Friday, February 26, 2010

Existing Home Sales... "Uh Oh" Edition

What happens when you begin to take away the stimulus (i.e. housing subsidies)? Sales once again fall even with reduced price levels.



Source: Realtor

4 comments:

Nelson said...

So housing goes from "stabilization for now" post a couple days ago to "uh Oh" edition in a couple days?

Jake said...

case shiller tries to determine what the actual value of homes are worth, while the latter details what they actually sold for.

either way, my "stabilization for now" post by no way made a bullish case for housing. the concern within both is that even though the government (i.e. taxpayers) have subsidized the hell out of the housing market, at a minimum the market is only stabilizing vs. rebounding.

i tried to explain this last march in a post 'Bail Out the Shelter, Not the Investment' (http://tinyurl.com/autswr). my case has always been that you can only prop up the market for so long.

with recent data that has been released, it looks like prices aren't rebounding and will need even more wasteful incentives to keep up the current levels.

Anonymous said...

Keep posting stuff like this i really like it

Anonymous said...

This is Japan all over again.
Stimulus based economy that is completely reliant on the government getting into more debt, with larger deficits and more quantitative easing.
Consumer deleveraging, peak oil growth ceiling, and China and India losing steam.
Cheap money wont fuel markets for long, look at Japan.
I just cant see anything that would propel the market on a sustainable basis.
I am forever an optimist but this bear rally looks like its on its last legs.

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