bloomberg news: home sales unexpectedly rise as prices drop

[papalovesmambo]

Posted: 10/27/08 at 10:48am

http://www.bloomberg.com/apps/news?pid=20601068&sid=afCmMwBi_ONw&refer=home

who'd a thunk it?

i look foward to tomorrow's scintillating article examining the recurring phenomenon of the big bright ball in the sky that allegedly rises in the east and sets in the west.

Updated On: 10/27/08 at 10:48 AM

[YouWantitWhen????]

Posted: 10/27/08 at 10:51am

Sales rose as prices dropped.

What is surprising about that?

You may want to amend the title of this thread.

[papalovesmambo]

Posted: 10/27/08 at 11:01am

i'm quoting their title.

[madbrian]

Posted: 10/27/08 at 11:04am

Their title:

Home SALES Unexpectedly Rise as Prices Drop

[papalovesmambo]

Posted: 10/27/08 at 11:12am

dammit. this is what i get for trying to post and decipher turkish addresses at the same time. damn turks and their refusal to list postal codes!

Updated On: 10/27/08 at 11:12 AM

[Calvin]

Posted: 10/27/08 at 11:19am

Why did Constantinople get the works?

[papalovesmambo]

Posted: 10/27/08 at 11:32am

i have been repeatedly warned that i should not even even hum that song.

[PalJoey]

Posted: 10/27/08 at 12:21pm

How are home prices in Istanbul?

Before they dropped, Istanbul was Constantinople, now it's Istanbul, not Constantinople.

Been a long time gone since Constantinople, now it's Turkish delight on a moonlit night.

[Calvin]

Posted: 10/27/08 at 12:27pm

I wish my rent was what it would have been in the days of New Amsterdam.

[papalovesmambo]

Posted: 10/27/08 at 12:45pm

depends on if you're looking in findikli, kozyatag, sahrayicedid, koþuyolu-kadýköy, kavacik-beykoz, levent, ulus, taksim or tuzla.

pj, you strike me as a kozyatag kinda guy.

[PalJoey]

Posted: 10/27/08 at 1:06pm

Is there much of a gay nightlife scene in Kozyatag?

[best12bars]

Posted: 10/27/08 at 1:10pm

I hear it's Kozy.

I'm a little scared about the rise in home sales. While they're much more affordable than they used to be a short while ago, they're still not down into the realms of "realistic" based on buyer's income.

Unless these are are "rich people" homes.

But if it's anything other than a fixed rate loan, the banks and buyers ought to be ashamed of themselves. The loans will default when their mortgages go up. They'll be adding to the terrible problem in 3-5 years, most likely.

Unless they're fixed rates. Which means these buyers have "greater than average" money to spend on housing.

[YouWantitWhen????]

Posted: 10/27/08 at 1:25pm

There are actually programs in LA county that provide an interest-free down-payment to people who could otherwise afford the payments - a friend is looking in Hawthorne, and is getting a chunk interest free for the down, and can afford the rest of the payments based upon their income.

[FindingNamo]

Posted: 10/27/08 at 1:30pm

I was so confused. I just thought, "Oh, as usual I don't understand economics." I felt like John McCain.

[papalovesmambo]

Posted: 10/27/08 at 1:31pm

i dunno, besty. my nephew just bought a house in ohio. it's a 3 bedroom and they were asking $55k and he got it for $33.

[PalJoey]

Posted: 10/27/08 at 1:44pm

Besty--for some people, especially buyers who are not planning on staying more than 5 years, a 5-year adjustable is still worth considering. Not all adjustables under all conditions are evil.

[papalovesmambo]

Posted: 10/27/08 at 1:52pm

as long as they realize going in that they could get hosed, pj. i don't want them crying for a bailout in the 5th year when their place is worth 67% of what they paid for it, "the payments just jumped and i can't afford them anymore, so the government should pay off my loan for me."

[nygrl232]

Posted: 10/27/08 at 3:53pm

New Amsterdam? Heck Calvin, I'd take rent during the time of one-piece Czechosolvakia.

[best12bars]

Posted: 10/27/08 at 4:07pm

"as long as they realize going in that they could get hosed, pj. i don't want them crying for a bailout in the 5th year when their place is worth 67% of what they paid for it, "the payments just jumped and i can't afford them anymore, so the government should pay off my loan for me.""

Exactly, papa.

That's the problem, PJ. If they lose equity in their homes, the scenario you painted is the same one people are going through right now.

It doesn't work. The government can't bail you (or the banks) out again if you can't sell your home in 5 years without taking a huge loss, or stay and afford the adjusted rate.

And ultimately it's the banks again that would take the heat, because people (like today) would just stop paying their higher mortgages and wait for the banks to foreclose on them. There's a long queue right now. Some have missed as many as 4 payments, and the banks are already backlogged on this "dumped" property. They'll catch up I'm sure eventually... but this problem can NEVER happen again. And if the banks are dumb enough to issue ARM loans again, they'll be getting what they deserve by starting the whole "pyramid scheme" over again. God, help us all if they do.

And YWIY---if they can afford a 30-year fixed rate house with an interest free down payment, great! When that happens to all "average" Americans looking for "average" homes, that's when the housing market will finally be back to normal, and we can start looking to the future again.

Right now, the future holds further drops in the housing market. It ain't over yet.