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Joined: 14 Jul 2007
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Location: Greater Boston
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admin
Site Admin
Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston
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 Posted: Wed Aug 19, 2009 1:42 pm GMT Post subject: |
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From the article:
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RE/MAX of New England, a real estate network of franchisee owned and operated brokerages, said that it is seeing signs that a confluence of low mortgage rates, dropping prices, and home buyer tax credits is having a positive effect on the local housing market.
In a new report, RE/MAX said: "Single family home sales activity in each New England state showed double digit increases in June over the previous month," which RE/MAX characterized as "an indication that the housing market is beginning to stabilize and consumer confidence has strengthened."
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Here's what bugs me... this "stabilization" is only as stable as the underlying causes. Let's look at each of the cited ones:
- Low mortgage rates - Very insecure, in my opinion. Any number of real possibilities threaten to end low mortgage rates: foreign entities slow down purchases of US debt (let alone if they start to sell), China decouples from the dollar, inflation picks up, or The Fed ends its direct intervention in the mortgage market, as planned. Current housing prices are still completely predicated on this very cheap money, and this is not a stable foundation.
- Home buyer tax credit - Not secure at all. This source of support is expiring within months.
- Dropping prices - I'll give them this one. However, it doesn't (yet) apply to many of Boston's "immune" towns where price declines have been meager and sales volume has withered.
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balor123
Joined: 08 Mar 2008
Posts: 1204
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| Posted: Thu Aug 20, 2009 1:18 am GMT Post subject: |
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| Yeah it's pretty clear that information like this applies to the nation and that "immune" Boston towns are a whole different beast. |
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john p
Joined: 10 Mar 2006
Posts: 1820
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| Posted: Thu Aug 20, 2009 2:15 pm GMT Post subject: |
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The biggest hole in my understanding (that I'm aware)  is not having current data on household incomes. To me that is the "reach height" of a market. Certain societies are prone to overreaching, and others like in Germany, to not spend too much. The banks are limiting the overreaching, but I really want to know what the fundamental reach height is regardless. Does anyone know of a good source to get this information? |
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balor123
Joined: 08 Mar 2008
Posts: 1204
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| Posted: Thu Aug 20, 2009 5:56 pm GMT Post subject: |
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| I don't buy this "consuming too little" philosophy. This world has limited resources and we shouldn't waste them keeping people employed. May as well just put them on welfare (it's like buying brownies from a girl scout when you can just donate money directly to them without also paying off the companies that makes the cookies). |
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john p
Joined: 10 Mar 2006
Posts: 1820
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