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MAR: more govt intervention needed for stabilization

 
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PostPosted: Tue Oct 27, 2009 2:27 pm GMT    Post subject: MAR: more govt intervention needed for stabilization Reply with quote

None of the articles this morning seem to be quoting actual prices or year over year changes from The MAR, so I'm going to aggregate a few articles here. First, The MAR reported that the median prices for single family homes in Massachusetts fell 1.7% in nominal terms from September 2008 to September 2009:

http://www.marealtor.com/content/NewsTicker.htm?view=38&news_id=1178&news=31

This quote is highly insightful:
Quote:

"We really feel that the past three months of positive home sales are a result of the $8,000 tax credit and its impending expiration date," said MAR President Gary Rogers, a broker with RE/MAX First Realty in Waltham. "Despite this bump, we are concerned that it will take longer and be more difficult for the market to stabilize without extending the Federal tax credit for homebuyers past the December 1 deadline."

In essence, recent data does not demonstrate stabilization, it does not demonstrate a bottom, it only reflects government life support. If the market had truly hit bottom, there would be no need for continued government intervention. (Which isn't to say that there is a "need" for it pre-bottom either, just that calls for help with "stabilization" are pointless if stabilization already exists.)

The Warren Group offered slightly different numbers, stating that the nominal year over year decline was 1.4%:

http://www.boston.com/business/ticker/2009/10/mass_home_sales_8.html

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Renting in Mass



Joined: 26 Jun 2008
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Location: In a house I bought in December 2011

PostPosted: Tue Oct 27, 2009 3:04 pm GMT    Post subject: Reply with quote

Quote:
None of the articles this morning seem to be quoting actual prices or year over year changes from The MAR


That's odd. They always have in the past.

Interesting that the MAR YOY decrease is more than the Warren groups. That's a reversal.

I think September was the only chance for a YOY increase. It's all downhill from here. Amazing that with everything the Feds are throwing at the housing market that all we've seen is some tiny MOM bumps. They've only managed to get the market to tread water.

Interesting that the MAR is so scared of losing the tax credit that they are willing to concede that the positive numbers over the last few months were government induced.
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PostPosted: Tue Oct 27, 2009 3:17 pm GMT    Post subject: Reply with quote

Renting in Mass wrote:

Amazing that with everything the Feds are throwing at the housing market that all we've seen is some tiny MOM bumps. They've only managed to get the market to tread water.


What's more, this was with increasing intervention. It wasn't just the level of intervention itself but the fact that the intervention was greater than the year before. We might be back to steep price declines next year even if the $8K tax credit and mortgage market manipulation are extended because the year over year comparison will be with a year where they were also present (this year). It's no wonder that some in the industry were pushing for an actual increase in the tax handout from $8K to $15K. What if it requires continually increasing intervention just for prices to continue to (almost) tread water?

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Renting in Mass



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PostPosted: Tue Oct 27, 2009 3:28 pm GMT    Post subject: Reply with quote

Quote:
What if it requires continually increasing intervention just for prices to continue to (almost) tread water?


I think we're gonna find out! My guess is that increasing intervention becomes impossible (we might already be at that point), and prices eventually return to sustainable levels on par with historical norms. I haven't looked at the charts in a while, but I think getting to that point only requires another 10 or 15%. The problem is that the banks can't survive that.
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