Search This Blog

Tuesday, June 7, 2011

Silly Q; Obvious A

Been quite a lot of negative news about housing lately.. prices falling 33% overall which is more dramatic than even the Great Depression..  a glut of a couple million homes either being foreclosed upon or will eventually by year's end.. on and on.  Think about it this way-  the US housing market is so bad right now that not only has it double dipped but even the media has Admitted it.  When the media admits anything negative in this ongoing recession, you know things are Bad...

And yet..

No matter what the reality, you will still find articles with headlines like this courtesy of WSJ written on June 4th:

'Is it time to buy a home?'

Well is it?

Let's see if if this Hopium addicted writer for WSJ can convince us that Now is the time to Buy (blue font):

"There are growing indications that it is a good time to buy. Mortgage rates, which fell to 4.55% for the week ending June 2, according to Freddie Mac, are near 50-year lows. Homes have become more affordable than they have been in years: ... the ratio of home prices to income is now 20.9% lower than the 15-year average through 2010, and 12.5% lower than the 1989-2004 average. A historic glut of homes, meanwhile, has created a buyer's market: There were about 15 million vacant homes in the U.S. last year... some 3.1 million more than normal.

Such conditions might not last long... that the number of distressed sales will begin to fall in 2013, and that prices will begin to edge upward then. Home building is at a virtual standstill, so the supply overhang isn't likely to get much worse. Meanwhile, demographic indicators such as "household formation"—the number of new households each year—are on the rise, and promise to take a bite out of the glut in coming years."

~  Ok.. First, if you read my previous posting on how to read financial news, you see this section covers both the initial statistics and hard-sell elements. You see this in TV commercials often- the "Buy Now because with prices like These, these sales won't last!' pitch but applied to housing.  Second, notice in the second paragraph where it is predicted that the number of distressed homes will lessen in 2013-- well there's other ways to look at that.

For instance, that housing is not expected to stop its slide in value for another 18-24 months.   Or that if you do buy today, you best be in for the long haul because you won't recoup your money or make a profit when you sell for quite some time.  Lastly notice, 2013 is supposedly when home prices will Begin to rise, meaning no one has any clue how many years it will take for homes to go back to pre-recession values.

"The long-term benefits of homeownership remain very much intact. For now, at least, you can deduct the mortgage interest on your taxes—a big perk for people in higher tax brackets. You get to paint your walls any color you wish, without having to clear it with a landlord. And assuming you can buy a home for about the same price as you can rent one, buying will give you the ability one day to live rent-free. Come retirement time, a paid-off mortgage means your monthly expenses are significantly reduced, and you have a chunk of equity to play with."

~  Ooh.. Yess, what a wonderful selling point.  If you buy a home now, "you get to paint your walls any color you wish".. Ooh.. and maybe even choose the color of your appliances  Or.. Or..  choose your carpeting.. or heck.. forget carpeting..  how about marble tiles?  OOoo Goody Gumdrops- Wouldn't that be fun!?

"Here is a glimmer of what the future may hold: While overall home prices fell by 7.5% in April over the same period a year earlier, according to CoreLogic, a Santa Ana, Calif., provider of real-estate data and analytics, if you exclude distressed sales, prices were off just 0.5%. So if you are in a market that isn't battered by foreclosures, you may be close to a bottom already."

~ Are you F-ing kidding me?  That's the equivalent of saying if a sports team did not have those 10 losses out of 20 matches/games played, they'd be Undefeated.  Statistics can be manipulated but not THAT much.  Truth is home prices did fall 7.5% and it doesn't matter if it was due to distressed sales, or weather or any other factor(s)..  the value did drop- that's reality.

And no, if you think you are close to a 'bottom' in the value of your home or a particular area, guess again.  There is no magic bullet to fix this housing mess and if not for the hundreds of billions of dollars pissed away by Freddie and Fannie Mae in an attempt to stabilize home prices, in all likelihood, home values would have dropped an additional 25-30% by now.

The rest of the article goes on and on with the same nonsense and if you wish to believe all is well with housing and it is a good time to buy a home or invest, then here's the link below, and God Bless to you...

To the rest of you, Congratulations, you just earned a "Smart Kitty" merit badge

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.