March new home sales plummet 14.5 %

16 Replies

Is the bubble about to burst?

Time to buy more?? :)

Absolutely not. March sales were down becuase of the weather. We all going to die from climate change before the bubble bursts. LOL

Sounds like you guys need to move south :)

Ned, Thats what they said in 2007 only to find properties 75% lower 30 months later. Bubbles always burst. With the stock market as frothy as it is when it goes so does the real estate market.

Jay - What about existing home sales?

Forbes>>

Existing-home sales dipped just slightly in March, bringing their volume to the lowest level since July 2012, data released by the National Association of Realtors Tuesday shows.

Sales of existing, or previously owned, homes fell by two tenths of 1% to a rate of 4.59 million (seasonally adjusted) in March, down from 4.6 million in February. That pace is 7.5% below the 4.96 million pace one year earlier. Sales have not been this slow since July 2012, when the pace was 4.59 million (seasonally adjusted).

Originally posted by @Jay C. :
Ned, Thats what they said in 2007 only to find properties 75% lower 30 months later. Bubbles always burst. With the stock market as frothy as it is when it goes so does the real estate market.

Jay, in 2007 they were giving loans to anyone who could fog a mirror, and giving loans at or above 100% financing, and fudging appraisals, and on and on. THOSE are signs of an impending pop, not a one-month change in home sales. You have to look at overall trends, not miniscule data. Graph the data, then see what the "trend line" is, not what happens each month without any other context.

@Sam Jones LOL, love it!

Saw the stat too and was wondering if bubble was about to burst etc etc... But looking at the stats, it's based on NEW home sales, so to further dissect the stat, could it have to do with the slowdown in new home constructions 3 years ago? i.e., situation where fewer homes built so fewer NEW homes sold?

Could have to do with a slowdown in construction during this cold winter?

Kim,

I simply passed along the national data. I did not create it. You can make up your own mind what it means.

When you say "they" I believe you mean the Banks? The Banks were just part of the crime back then. The investors who applied for those loans were equally or more to blame. You see that same desire for leverage within this site. Those who over extend will no doubt meet the same fate as before. Its a rinse and repeat cycle.

Myself, I love the carnage and miscues. I come in and pick up the pieces at a huge discount. No hurry to buy as these flippers and over leveraged investors will self destruct themselves yet again as they always have in the past.

Well in the California market the worst months were November October January and February.. March is actually a bounce back month, every house we had on the market got into escrow (7). I'm at a economic market update conference as I type, (the current Economist is a little boring lol) .. Great content regarding our whole economy... Based on these pros, 2014 should be a good year for job growth and there is No Bubble (at least in California).

@Jay C. Ha, yes. THIS.

Myself, I love the carnage and miscues. I come in and pick up the pieces at a huge discount. No hurry to buy as these flippers and over leveraged investors will self destruct themselves yet again as they always have in the past.

Jay,

Oh I know, statistics can be interpreted to mean whatever people want.

I didn't mean to imply that the last downturn was all the banks' fault, clearly the borrowers had no business getting loans they knew they could not afford. That said, there is nothing inherently wrong with leverage, it is a great tool to amassing wealth. I agree that buying during the carnage is great, I just don't see us having a major collapse in real estate values in the next year or two like we did a few years back.

In my area, Cincinnati, there is very little inventory right now. Less inventory equals fewer sales. Could be a contributing factor.

Wendy,

You can find the break down on any news feed as to what the numbers are on each specific location. The numbers come out monthly. In a monthly snapshot its meaningless data. Just day to day news.

Kim,

You are certainly right a bit of leverage is fine and dandy until it goes wrong. As all too many found out during the downturn and were destroyed. The banks didnt wreck them the market and levered speculators did. Leverage cannot react to the market. The owners do and if they dont they get hurt.Even if they do react they may get hurt. I disagree with the point leverage makes wealth. In many cases it provides no gain and lots of risk. Case in point you buy a home with no money down and rent it. If the market does not increase you have not made a dime. Its a implied hopeful gain on the land owners part. Lose that rentor and you can go negative very easy. BP is loaded with posts of more more more. Many of these folks will fail. Some will make it but in the end its not investing. Its more speculation and bordering on gambling.

Originally posted by @Jay C. :
Ned, Thats what they said in 2007 only to find properties 75% lower 30 months later. Bubbles always burst. With the stock market as frothy as it is when it goes so does the real estate market.

Jay my response was a joke, jokes don't always come across in written language sorry.

Here is a more serious response. Of course bubbles always burst. However we are not in a bubble nationally although we certainly could be in some markets. Of course we do not have to be in a "Bubble" for markets to drop.

Financing will make a bigger difference than what the stock market does. Much of the market is in the doldrums now becuase of the tough financing market.

Right now the market is very fragmented. Some areas showing great appreciation, some showing tough times. In some areas the investor market is hot is others it is in the tank becuase of lack of financing available. Traditional valuations like price to median income, cost to rent vs cost to own, Wholesale investor market vs retail homeowner market etc. are all screwed up. Hedge funds have come into the market to add another unknown.

Bottom line no one knows which direction we are headed.

Ned,

I couldnt agree more. Well said.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here