Home sales fall 16% in November

posted at 2:55 pm on January 5, 2010 by Ed Morrissey

Last month, analysts announced an 11% drop in new-home sales in November as first-time homebuyer tax credits initially expired.  The news was actually worse than that.  Overall, the residential market dropped 16% month-on-month in November, far more than analysts had predicted:

Pending home sales unexpectedly plunged in November, according to a report issued Tuesday by the National Association of Realtors, posting their largest drop on record after several months of positive gains for a closely-watched indicator of housing market activity.

According to the industry group, November pending home sales activity dropped by 16% to a reading of 96.0, compared with the previous month’s reading of 114.3. The drop was much larger than expected by Wall Street, which was looking for a dip of 2% for the indicator for November.

It was the largest drop, point-wise, since the industry group started the index in 2001, dragging the indicator to its lowest level since June.

NAR officials said the drop was related to a decrease in sales activity as the original Dec. 1 deadline for the first-time home-buyers tax credit approached. Pending home sales are contracts signed,  meaning it could take several months for a home buyer to finance and finish the transaction. A November home buyer may have been too late to qualify for the original deadline.

Overall, housing sales improved by 15% over the previous year — but that may not be all good news.  The tax credit appears to have incentivized buyers who already had the means to purchase new homes to do so earlier than they might have done otherwise.  Just as with Cash for Clunkers, it seems to have resulted only in shifting sales rather than stimulating purchases that would not have occurred without the artificial incentives.  The 15% increase for the year matches the drop in November, and we have yet to see December’s numbers.

The best way to stimulate housing sales will be to create jobs and wealth in the marketplace.  That may not be as “sexy” as a tax credit, but it will be far more effective.  While we remain in double-digit unemployment or even in high single digits, wages will be depressed and people won’t have the money to buy.  We already have an explosion of bankruptcies that will impede the housing market in 2010.  Shifting sales into the first quarter will produce another temporary bump, followed by another precipitous drop.

A rational economic plan based on lowering taxes and significant reductions in government spending and deficits would be the best possible “stimulus” for housing, unemployment, and the economy as a whole.  Everything else is the kind of government intervention that created bubbles and collapses for the last ten years.


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We already have an explosion of bankruptcies that will impede the housing market in 2010.

Maybe I should wait to buy that house. But then again as Ed indicated…. the bubble is going to blow again.

upinak on January 5, 2010 at 2:58 PM

Stimulus worked!

See, wingutz?

Good Lt on January 5, 2010 at 2:59 PM

Another “unexpected” drop, of course. We’ve not seen the bottom yet, folks.

CP on January 5, 2010 at 2:59 PM

A rational economic plan based on lowering taxes and significant reductions in government spending and deficits would be the best possible “stimulus” for housing, unemployment, and the economy as a whole.

I saw a “boy” at the end of that.

lorien1973 on January 5, 2010 at 3:00 PM

There’s that word again…..”unexpectedly”.

txsurveyor on January 5, 2010 at 3:00 PM

I want prices to fall further. The prices in SoCal are still insane. Prices are still higher than they were 5 years ago despite having a 1930s economy. The government created this bubble and they’re doubling down on it.

Apologetic California on January 5, 2010 at 3:01 PM

That may not be as “sexy” as a tax credit, but it will be far more effective.

But what’s sexier than insulation???

WashJeff on January 5, 2010 at 3:01 PM

“The best way to stimulate housing sales will be to create jobs and wealth in the marketplace.”

We can’t have THAT…!

Seven Percent Solution on January 5, 2010 at 3:02 PM

This Administration is fully prepared to undertake or put in place any measures to remedy this problem… except those which have been shown to work. It’s all a gedanken experiment to these academic and government lifers, but those outside of those realms are paying the price.

ya2daup on January 5, 2010 at 3:02 PM

I blame Bush.

JammieWearingFool on January 5, 2010 at 3:02 PM

Hmmm…. isn’t it interesting that every statistic that comes from this Administration, is ALWAYS revised a month or so later to be WORSE?

Whether its budget numbers, the debt, or unemplyment numbers… they always seem to get revised, right after the news cycle on the origional number stops.

Romeo13 on January 5, 2010 at 3:03 PM

A rational economic plan based on lowering taxes and significant reductions in government spending and deficits would be the best possible “stimulus” for housing, unemployment, and the economy as a whole.

Even the Left’s other favorite president (JFK) knew this simple fact, but they won’t admit it today because it validate Reagan and what they refer to as ‘trickle down’ economics. Even the not conservative enough Daddy Bush called it ‘voo-doo’ economics.

Tony737 on January 5, 2010 at 3:03 PM

The sales are primarily entry level homes…buyers of larger homes that want to down size (read retirement age) can’t sell their homes.
And how the boomers go, so goes the economy…it will just get worse, until the gov. figures that people actually have to have jobs to buy a home.
What a novel idea…

right2bright on January 5, 2010 at 3:03 PM

Things to keep in mind: About 2/3 of home sales are repos and short sales. Investors are crowding out real “first-time” buyers. Most of these sales are low-end housing, and existing housing; these do nothing to stimulate the construction business. Until the overhang of new house inventory is cleared out, there won’t be much new home construction, or little things like “jobs” for construction workers.

We’re a long ways from being out of the woods.

NeighborhoodCatLady on January 5, 2010 at 3:04 PM

Again, Obama doesn’t feel he is responsible.

ctmom on January 5, 2010 at 3:04 PM

Watch Beck tonight, he will outline Yobama’s plan to tank the economy, this is all part of it.

Alden Pyle on January 5, 2010 at 3:04 PM

The economy will not turn around until businesses are confident that they won’t be plowed under with massive tax increased, seized in the name of the Democrat Party, or otherwise killed off. What is needed is tax cuts and targeted incentives along with scrapping the worst of what could kill free enterprise like Obamacare and Cap & Tax.

Expect the administration to turn its usual deaf ear to the voice of the people. They are closer than ever to socializing this country and they won’t let anything get in their way. They will skulk in the shadows to pass Obamacare. The will grant amnesty to illegals. They will funnel federal money to ACORN to ensure that the 2010 and 2012 elections are nothing but bribefests. They will rig the census. These are evil people who need to be squashed like a bug.

highhopes on January 5, 2010 at 3:05 PM

Anything that sounds like bad news is really good news and just a “lagging indicator” of the recovery boom we’re experiencing.

/trolls

mankai on January 5, 2010 at 3:05 PM

Yet if an uptick ever arrives, Ogabe will tell us it was totally expected and all part of the plan.

Bishop on January 5, 2010 at 3:05 PM

The statist morons in DC look at the economy as a zero-sum game. They don’t understand that tax cuts cause economic growth.

OhioCoastie on January 5, 2010 at 3:05 PM

But what’s sexier than insulation???

WashJeff on January 5, 2010 at 3:01 PM

Watch your language!

mankai on January 5, 2010 at 3:06 PM

A rational economic plan based on lowering taxes and significant reductions in government spending and deficits would be the best possible “stimulus” for housing, unemployment, and the economy as a whole.

blasphemy you say! Surely increases in taxes, gov’t spending and deficits are the clear path out of this morass the White House has created. /s

ted c on January 5, 2010 at 3:06 PM

Prices are still higher than they were 5 years ago despite having a 1930s economy.
Apologetic California on January 5, 2010 at 3:01 PM

I sold 5 years ago (in California), and the house I sold is worth 30% less then what I sold it for…if they could find a buyer.
Very few places in California have not dramatically dropped in price…you must be living is one of those places.

right2bright on January 5, 2010 at 3:06 PM

right2bright on January 5, 2010 at 3:03 PM

What right have YOU to tell people they need to get a job to BUY a home! I mean we are the U.S.A. and can take care of our illegals! How can you NOT afford a home? Don’t you know that we will PAY for you as long as you give us, the Gov. half of it back now and the rest with 14.5% interest in 5 years!!!

/s

upinak on January 5, 2010 at 3:07 PM

Unprecedented. Again.

portlandon on January 5, 2010 at 3:07 PM

It’s unprecedented how often these drops occur unexpectedly.

red winger on January 5, 2010 at 3:08 PM

They will rig the census. These are evil people who need to be squashed like a bug.

highhopes on January 5, 2010 at 3:05 PM

Ohhh, nooo, they are not evil, just wrong as Allahpundit puts it. There has to be a devil for there to be true evil. There has to be a God for there to be a devil. And since there is no God, there is no “evil.” See how logical he is?

leftnomore on January 5, 2010 at 3:09 PM

I mean we are the U.S.A….

upinak on January 5, 2010 at 3:07 PM

USA!!….USA!!!…USA!!!…USA!!!!

portlandon on January 5, 2010 at 3:10 PM

All these new bankruptcies are going to mess up the credit ratings of these people for 5 to 7 years. Making it harder for them to qualify for a mortgage, get a credit card, buy a car, etc. That’s not going to help the economy grow.

MarkTheGreat on January 5, 2010 at 3:11 PM

OhioCoastie on January 5, 2010 at 3:05 PM

I think they do. They just don’t care.

PappaMac on January 5, 2010 at 3:12 PM

Another “unexpected” drop, of course. We’ve not seen the bottom yet, folks.

CP on January 5, 2010 at 2:59 PM

Of course. It was unexpected only because whoever wrote it has been reading the All Happy Obama News, and not looking at anything beyond the Dow Jones average.

I keep wondering why everyone keeps talking about the economy “improving”. Show me an improvement. Any improvement. Show me a positive net monthly jobs figure. Show me a company with improved sales and earnings year-to-year. Show me a single day’s tax revenues that are better than last year. Show me an increase in manufacturing…anywhere.

Jaibones on January 5, 2010 at 3:12 PM

upinak on January 5, 2010 at 3:07 PM

They make it easy, instead of sending you the bill, I just have the feds pay my mortgage….thanks.
But I am confused, I want to add a patio, should I send you the bill, or do I have to go through that red tape of the housing authority…?

right2bright on January 5, 2010 at 3:12 PM

Where is Bleeds Blue to blame it on white male conservatives?

WisCon on January 5, 2010 at 3:13 PM

right2bright on January 5, 2010 at 3:12 PM

*smack* send it to Allah!

upinak on January 5, 2010 at 3:13 PM

They don’t understand that tax cuts cause economic growth.

OhioCoastie on January 5, 2010 at 3:05 PM

Oh they understand it (at least their leader Obama does), but they don’t care, because tax cuts don’t benefit (directly) their key constituencies — slackers, welfare queens, illegal aliens, and others who don’t pay income taxes — and therefore tax cuts are not “fair.”

AZCoyote on January 5, 2010 at 3:17 PM

Where is Bleeds Blue to blame it on white male conservatives?

WisCon on January 5, 2010 at 3:13 PM

He’s getting forclosed on today. He’s in a U-Haul headed for Obamaville.

portlandon on January 5, 2010 at 3:17 PM

Houses are racist.

Weight of Glory on January 5, 2010 at 3:17 PM

How can they say this is unexpected? In order to get the tax credit you had to have your deal pretty much wrapped up by October in order to be sure you didn’t go past the December 1 deadline.

A Realtor told me they were making sure it was closed by October 30 just to be sure.

The extension didn’t happen till it was too late for people planning on it and that is over in April.

LifeTrek on January 5, 2010 at 3:21 PM

Overall, the residential market dropped 16% month-on-month in November, far more than analysts had predicted:

Eventually, after decades of uber-rosy-predictions month to month in every possible field, someone would ask the analysts to stop making sh!t up and give us the facts.

uknowmorethanme on January 5, 2010 at 3:22 PM

Let me be clear, an unprecedented B+. But hey, at least this will give the newscasters a future opportunity to mention how the recession is over if housing trends upwards slightly in the next few months. It’s the most-endingest recession ever! Yay Obaka!

rogerb on January 5, 2010 at 3:23 PM

A fall in home sales was inevitable in some fashion the minute the “Baby Boom” ended, but what a lousy time for it to happen.

Dark-Star on January 5, 2010 at 3:23 PM

Experts, David Brooks, and Mark McKinnon hardest hit.

SouthernGent on January 5, 2010 at 3:24 PM

The fall in home sales is an isolated event…

right2bright on January 5, 2010 at 3:25 PM

The goal of socialism is not to create jobs and employment in the private sector.

Dhuka on January 5, 2010 at 3:31 PM

A fall in home sales was inevitable in some fashion the minute the “Baby Boom” ended, but what a lousy time for it to happen.

Dark-Star on January 5, 2010 at 3:23 PM

Yes, it was inevitable, downsizing, and moving from the north to the south, it all is tied to the boomers.
And as we continue to retire, the problem will continue.
But a pro-active gov. could have acted, over taxing, punishing small business, and medium sized business (actually any business) is a huge mistake.
Not having a proper economic plan, for something so easy to have seen is maddening…this isn’t even a Clinton, Bush, Obama thing as much, it is a congress thing. They set the budget, and they should be protecting their home interests…but they didn’t and they aren’t…

right2bright on January 5, 2010 at 3:34 PM

But what’s sexier than insulation???

WashJeff on January 5, 2010 at 3:01 PM

Well, there’s caulk, for one.

TexasDan on January 5, 2010 at 3:34 PM

This is so reminiscent of when Spurrier coached the Redskins. Except Spurrier was more successful. I’d love to see Obambi try to slam his visor, though.

AubieJon on January 5, 2010 at 3:35 PM

right2bright on January 5, 2010 at 3:34 PM

On the surface, and temporally, true… but if the market was truly free, it would make the necessary adjustments.

mankai on January 5, 2010 at 3:35 PM

I’m going to start a business called the Green Sign Company and rake it in! I saw green recovery act signs all over the freeways this weekend. No workers, just signs.

PattyJ on January 5, 2010 at 3:36 PM

Yes, it was inevitable, downsizing, and moving from the north to the south, it all is tied to the boomers.
And as we continue to retire, the problem will continue.

right2bright on January 5, 2010 at 3:34 PM

Yep. Thing is, the Boom was just plain unsustainable, as it fed directly from circumstances created by World War 2.

But the true problem came from fiscal mismanagement by Congress, chief among such being the looting of SS retirement funds. I suppose it was just too optimistic to hope for government to not touch a pool of unspent money.

Dark-Star on January 5, 2010 at 3:39 PM

Where is Bleeds Blue to blame it on white male conservatives?

WisCon on January 5, 2010 at 3:13 PM

Bleeds and Norman are having tea.

CWforFreedom on January 5, 2010 at 3:40 PM

but that may not be all good news. The tax credit appears to have incentivized buyers who already had the means to purchase new homes to do so earlier than they might have done otherwise.

Can anyone say ‘cash for clunkers’?

The bonus question is…are the people buying homes now speculative ‘flippers’, or people who need homes?

percysunshine on January 5, 2010 at 3:42 PM

But what’s sexier than insulation???
WashJeff on January 5, 2010 at 3:01 PM

Well, there’s caulk, for one.
TexasDan on January 5, 2010 at 3:34 PM

I’m gonna caulk ya nice and slooooow….

bloviator on January 5, 2010 at 3:44 PM

He’s getting forclosed on today. He’s in a U-Haul headed for Obamaville.

portlandon on January 5, 2010 at 3:17 PM

I thought he/she/it lived in it’s mothers basement?

MarkTheGreat on January 5, 2010 at 3:46 PM

For the longest time my gut has been telling me we are going to see another serious dip in the market as well. I rode the wave coming out of March last year, but backed off a couple of months ago. Nothing really makes much sense in the market these days and that left me feeling some anxiety.

joedoe on January 5, 2010 at 3:46 PM

On the surface, and temporally, true… but if the market was truly free, it would make the necessary adjustments.

mankai on January 5, 2010 at 3:35 PM

Builders aren’t stupid. They can read demographic charts as well as any govt economist. The fact that the Baby Boom drop off is coming has been well known for years.

MarkTheGreat on January 5, 2010 at 3:49 PM

Any inside news on the crash of the cargo jet?

joedoe on January 5, 2010 at 3:50 PM

I just sold a house in Riverside, Ca. because it was priced right. Too many homes in my area are still priced too high. They won’t be worth what their asking for ten + years. I hope to see prices come down after the spring. And the Banks figure out what their doing or at least figure out what they need to do.
Here is an Article from last weekend Sac Bee.

multiuseless on January 5, 2010 at 3:52 PM

Builders aren’t stupid. They can read demographic charts as well as any govt economist. The fact that the Baby Boom drop off is coming has been well known for years.

MarkTheGreat on January 5, 2010 at 3:49 PM

Not to imply that they ARE stupid…but then what was up with the latest round of McMansion-building?

Dark-Star on January 5, 2010 at 3:53 PM

Not to imply that they ARE stupid…but then what was up with the latest round of McMansion-building?

Dark-Star on January 5, 2010 at 3:53 PM

People were buying.

The drop off was due to the govt created bubble bursting, not the ending of the baby boom.

Not all retirees buy smaller homes, some go upscale when they move to Florida.

MarkTheGreat on January 5, 2010 at 3:55 PM

Don’t assume that Obama or Pelosi want the economy to get better. They do not.

jukin on January 5, 2010 at 3:59 PM

Why do we have to pay for houses anyway.

It should be a right.

And rich people should have to pay for it.

Then life would be fair.

notagool on January 5, 2010 at 4:00 PM

On the surface, and temporally, true… but if the market was truly free, it would make the necessary adjustments.

mankai on January 5, 2010 at 3:35 PM

Certainly, but since it isn’t free, nor has it ever been free for the last 50 years, congress has the responsibility to “right” the ship…they won’t so hopefully we will elect people who will….but what politician in Washington has reduced the size of government?

right2bright on January 5, 2010 at 4:02 PM

I used to sell real estate, and the fact is that sales always fall this time of year anyway.

Terrye on January 5, 2010 at 4:03 PM

Builders aren’t stupid. They can read demographic charts as well as any govt economist. The fact that the Baby Boom drop off is coming has been well known for years.

MarkTheGreat on January 5, 2010 at 3:49 PM

What they didn’t know was the extent that congress had in taking bribes and being manipulated by the mortgage markets…they were building for the retirement, hence the over building in Arizona and Florida, Nevada, and other retirement areas.

right2bright on January 5, 2010 at 4:04 PM

A rational economic plan based on lowering taxes and significant reductions in government spending and deficits would be the best possible “stimulus” for housing, unemployment, and the economy as a whole.

Ed, I’m a bit confused. You say we should lower taxes, but the tax credit to first time and move up homebuyer’s does lower their taxes. So are you really saying that we should lower corporate taxes to spur job growth? If this is a ‘rising tides raise all boats’ argument, I’m with you. But when Reagan tried it, the Dems screamed bloody murder and even Bush1 called it ‘vodoo economics’.

Exit: what kind of tax cut for businesses would a Democratic Prez and Congress stomache?

DrW on January 5, 2010 at 4:06 PM

Certainly, but since it isn’t free, nor has it ever been free for the last 50 years, congress has the responsibility to “right” the ship…they won’t so hopefully we will elect people who will….but what politician in Washington has reduced the size of government?

right2bright on January 5, 2010 at 4:02 PM

Why do you believe that congress, even if it were actually interested in doing right by the economy, is capable of figuring out what the “right” policies are to undo the damage caused by their previous interventions in the marketplace?

The best thing congress can do is to just get out of the way. Stop trying to fix the economy. Stop trying to make things “fair”. Just lower spending, lower taxes, eliminate most regulations, and just get the h#ll out of our lives.

MarkTheGreat on January 5, 2010 at 4:08 PM

right2bright on January 5, 2010 at 4:02 PM

Oh, I agree. That’s why I put in the big “IF”. :)

Lefties always use static analysis too. They never think beyond today.

mankai on January 5, 2010 at 4:08 PM

DrW on January 5, 2010 at 4:06 PM

I’m sure Ed is talking about a broad based tax cut on incomes. Not cuts that are targeted towards politically favored groups.

MarkTheGreat on January 5, 2010 at 4:09 PM

And the hits will just keep on coming. You ain’t seen nothing yet folks!!!!

ohiorebel on January 5, 2010 at 4:09 PM

The best way to stimulate housing sales will be to create jobs and wealth in the marketplace. That may not be as “sexy” as a tax credit, but it will be far more effective.

We shouldn’t be stimulating anything. Yes, we should create jobs and wealth, but having government get out of the private sector, but the best thing for the housing market is to let prices fall. Government re-inflating the popped bubble and it will have disastrous consequences for the future. It’s painful, because so many people’s wealth depends upon housing prices, but that’s tough. That’s what you get with cheap money and irresponsible Fed policy.

iamse7en on January 5, 2010 at 4:18 PM

A solid B+ for the housing market performance. Mmmmm, mmmmmm, mmmmmmm.

CC

CapedConservative on January 5, 2010 at 4:48 PM

Solid stimulus program with extention of $ 8,000.00 tax rebate and millions of jobs saved or created. Just don’t know where? You gotta love this Hope & Change.

MMMMM mmmmm mmmmm mmmmm

bluegrass on January 5, 2010 at 4:58 PM

I’m sure that if we give Fannie and Freddie a big box of blank checks, some nice sharpies to fill them out with and insist that they start backing high-risk and NINJA loans so that illegals and minorities can know the dream of home ownership, all those foreclosed on homes will fill up, and before you know it new home sales will start to rise again and neighborhoods will once again be filled with the sound of construction workers hard at work, building the American dream. Hey!! Maybe we can ask ACORN to help find more poor underprivileged buyers! I’d even bet that Barney Frank would pressure, I uh mean convince more banks to write more loans to more high-risk borrowers and TA DA! problem solved and millions and millions of jobs saved or created, maybe a billion! I mean, sure some will default and most will need some or all of their down payment subsidized, but hey what are taxpayers for anyhow?

The link below is 2-3 minutes long and well worth your time.

http://www.dailymotion.com/video/xbqhl8_america-rising-an-open-letter-to-de_news

stacy on January 5, 2010 at 4:59 PM

I used to sell real estate, and the fact is that sales always fall this time of year anyway.

Terrye on January 5, 2010 at 4:03 PM

True, so why were the “experts” surprised? On the other hand, if someone is looking to buy this time of year, you know they are most likely more serious than most buyers. :) (I saw this on HGTV, by the way…lol)

SouthernGent on January 5, 2010 at 5:07 PM

“Unexpectedly.”

Why don’t these ‘tards just go ahead and predict the worst, most realistic numbers they can come up with and quit being so surprised month after month?

Dr. ZhivBlago on January 5, 2010 at 5:09 PM

Where is Bleeds Blue to blame it on white male conservatives?

WisCon on January 5, 2010 at 3:13 PM

Still over on the Yon thread with Professor Gates. Still thinks Gates was handcuffed inside his home by the evil Cambridge cop.

Del Dolemonte on January 5, 2010 at 5:21 PM

Anyone who thinks that we are even remotely close to a bottom in housing needs to see the charts on page 2 of this First American Corelogic report. Note the tsunami of pending serious delinquency inventory coming this way!

http://www.facorelogic.com/uploadedFiles/Newsroom/RES_in_the_News/FACL_Shadow_Inventory_121809.pd

U.S. consumers owe OVER 11 TRILLION dollars in 1 – 4 family home mortgage debt(vs. 2.6 Trillion in 1990). That doesn’t even start to include the additional 2.6 Trillion in other consumer debts such as cars, boats, RV’s and credit cards. We’re talking 14 Trillion AT A MINIMUM that consumer owe… and we don’t pay the low, low interest rates that the gov’t gets to pay on its debt.

One Trillion (ONE) is $1 per second for 32,000 years… without interest! Noodle that one for a minute.

Americans took out and spent HUNDREDS OF BILLIONS of dollars in home equity loans from 2000 – 2007. They spent it on clothes, cars, boats, RV’s, 2nd homes, nannies, private schools, fine wine, fabulous vacations, etc. That home-ATM has been cut off… which is playing a huge part in unemployment…

Those debt-fueled jobs are not coming back any time soon and higher taxes, more regulation, Obamacare, Cap and Trade and Card Check will only make unemployment worse!!

People are screaming about the Fed Gov’t owing 12 Trillion… at least the gov’t can tax and they have a printing press… consumers owe MORE than the Fed Gov’t and many consumers have lost their only source of income… a job!

Subprime was simply the first link to break in an extraordinarily over-stretched chain of debt. Alt-A Option ARM loans are now defaulting at the same rate or at an even HIGHER rate than subprime… Prime loans are not far behind… we’ve only seen the tip of the iceberg in prime foreclosures. Commercial real estate loans are imploding. It’s only a matter of time for municipal bonds to implode too due to falling tax revenues.

ANY loan that was taken out when the market was grossly over-valued was a bad loan. If a “prime” borrower with perfect credit, full income documentation and a 20% down payment bought a house or a commercial building that was 40% over-priced, then THAT TOO WAS A BAD LOAN.

As Peter Schiff has been saying for a long time, the gov’t needs to stop artificially propping up over-inflated prices, let the bad investments get purged from the system and then, and only then, can we start the road to recovery.

Unfortunately, that does not buy votes and lawmakers would rather throw (our) good money after bad.

painesright on January 5, 2010 at 5:26 PM

Believe it or not, the tax credit actually did produce a few incremental first time buyers along with the throngs who were going to buy later anyway. My son, having moved to a different city to take his first job out of graduate school, was undecided between buying and renting. The tax credit covered most of his down payment, so he decided to buy.

bgoldman on January 5, 2010 at 6:29 PM

My son, having moved to a different city to take his first job out of graduate school, was undecided between buying and renting. The tax credit covered most of his down payment, so he decided to buy.

bgoldman on January 5, 2010 at 6:29 PM

Your son is not very bright then, at least financially speaking.

Especially buying in a city that you don’t know and might not even be there for too long. What if he hates his job and wants to leave after 6 months? Or what if he’s laid off? Last in, first out is usually the way it goes. He’s stuck. Or if he does leave, he loses 7% in closing costs. Plus the house is already probably worth 5% less than what he paid and by the end of this year will be worth 10% less.

Great move and so kind of Obama to set him up for a financial fall while barely out of school.

angryed on January 5, 2010 at 7:06 PM

He knows the city, having rented in it for six months before buying a house after his lease expired. He has the job of a lifetime, doing something he loves (designing robots), and his employers love him. In the unlikely event of layoffs where he works (and I’m not going to invade his privacy by saying why), he and some of his fellow engineers know how to go into business for themselves.

So, Ed, be angry at someone else.

bgoldman on January 5, 2010 at 7:15 PM

Remember all those people flocking to real estate classes? They’re now scrambling to get licenses to be fishing guides.

kens on January 6, 2010 at 4:29 PM