Source of Growth, Cause for Concern...
"The pace of existing home sales in the United States fell for a fifth straight month in August and prices dropped from year-ago levels for the first time in more than 10 years, a realtors group said on Monday."
"The National Association of Realtors said existing homes sales slipped to an annual rate of 6.30 million units from a 6.33 million unit pace in July."
"In addition, the stock of unsold homes on the market rose 1.5 percent to 3.92 million units. At August's sales pace that represented a 7.5 months' supply, the highest since April 1993."
"Kathy Lien, senior strategist at Forex Capital Markets in New York, said the most troubling aspect of the report was the drop in prices."
'"What was once the primary source of growth and expansion in the U.S. is now the source of concern and nervousness," she said."
"NAR chief economist David Lereah, however, said the August slip in existing home sales data could be the bottom of a slump for the sector."
'"This price drop, in my view, has stopped the bleeding in the sales marketplace," he said. "It seems that the 6.3 million level has now hit bottom. We are now flat with single-family home sales."'
"Prices will continue to come down in the short-term, Lereah said, and sales will remain flat. Still, he emphasized that the pace of sales in August has not slipped as badly as in previous months."
'"That is good news for housing," he said. "The health of the housing sector is in transactions, is home sales, not home prices."'
Spoken like a true realtor. They need people to think it is safe to keep buying. You can buy from a true underwater FB and still get screwed. Buying now is still a Fool's market, and it is just dumb to catch a falling knife. It hasn't even sunk in yet to many sellers that the winds have changed. Many have no idea how to explain the run-up in unrealistic price gains, but feel entitled to it anyway. No more indulgence of magical thinking. Why would you want to indenture yourself for life to pay for someone else's sense of entitlement and maxed out credit card of a house?
'"The conclusion that I'm drawing is that we're very close to the bottom of the housing market," said Bernard Baumohl, executive director of The Economic Outlook Group in Princeton Junction, New Jersey. "By the first quarter of next year, we'll start to see a rebound."'
Close to the bottom? A rebound? (stifling laughter) Something tells me we have only just begun. First quarter of next year I bet we start to see some panic as the bulk of the ARMs readjust.