Over Built
From the government a new report comes out on new homes and how they are not selling. The story to follow my thoughts. In the story it talks about how the homes may be overpriced. WELLLL DUUUUUUHHHHHHHHH!!!!!!.
In a way I think the report is very promiseing and positive. That it shows the consumer may be getting smarter. Why do I think this, well here is why. First the homes being built are way over priced for what you are getting. Here in Colorado the average home is around 235,000. This is way to much money to have a view of your nieghbors siding or bathroom window. These homes are being built right on top of each other. For instance in a new little hooitie tootie suberb that is being built near highway 8 and 285. These homes are huge and beuatiful, yet in the upper 6 digits to 7 digit figures on the price they do not have even one acre of property to sit on. Now for this price you need to have at least one acre of land to sit this mamoth home on.
Next lets look at these socalled affordable mortgages. The interest only loans that end up with a massive balloon payment that is sending many people into forclosure. First the consumer is learning that this may be attractive in order to get into one of these overpriced cheaply built homes, yet after the first five years coming up with the 30 to 40 thousand dollar balloon payment is murder. A subnote to forclosures .... many below market mortgages that were handed out to minorities on special programs to attract illegals and other immigrants into becoming home owners was nothing more then a sceme to steal money from uneducated people who are now looseing their homes.
Finnally I would hope and like to think that the consumer is wiseing up to how cheaply these homes are being built. So many contractors are upping the price yet cutting more and more corners. How they are getting away with this is astonishing as I thought inspections were to be conducted at certain points during construction to prevent this. Obviously the inspectors are not doing their job. The use of cheaper materials, lack of quality and skirting codes are being deliberatly done. This being said here is the story on the homes.
Glut of unsold new homes across US hits record high
http://www.breitbart.com/news/2006/07/27/060727164635.phgh289u.html
The glut of brand new unsold homes for sale across the United States hit a record high in June, a government report showed, as some economists warned of a worsening market in coming months.
The latest data appeared to confirm a cooling trend in the housing market, following a boom and sky-rocketing prices of recent years that have priced many hopeful new home owners out of the market. In recent months, a steady rise in interest rates hikes has prompted a downturn in home buying.
Sales of new US homes declined three percent in June to a weaker-than-anticipated annualized rate of 1.131 million units, the Commerce Department said Thursday.
The drop in new home sales was steeper that most market-watchers had expected. Wall Street economists had only predicted sales to decline to 1.164 million units.
Analysts also zeroed in on the inventory of unsold new homes which leapt to a record high last month.
The government said the inventory of unsold new homes on the market rose 0.7 percent in June to a record 566,000, representing a 6.1-month supply of brand new homes at the June sales pace.
Most of the unsold new homes are located in the south of the country, the report showed.
Apart from a slight one month drop in the inventory in May, the stock of unsold new homes on the market has risen steady over the last 12 months.
"Many individuals, who signed a (purchase) contract in what they had believed was a booming housing market, may now be backing out of those contracts," said Phillip Neuhart, an analyst at Wachovia Securities.
"Thus, the new home market is likely weaker than new home sales reflects. We expect both existing and new home sales to continue their slide throughout
this year and the next," Neuhart said.
Some analysts are calling for a bursting of what they see as a property bubble and the report could exert fresh pressure on the Federal Reserve to pause its cycle of rate hikes.
The home sales market has been one of the key pillars propping up the world's largest economy, and while inflation is rising, the Fed will not want to jack up interest rates too much and risk a property market crash.
New homes sales across the United States have now fallen 11.1 percent compared to June 2005, and as the federal funds interest rate has risen to 5.25 percent.
"This was a weak report," observed Patrick Newport, an economist at Global Insight.
"Our view remains that sales will continue to slow over the course of this year and into next, because higher interest rates and rising home prices have reduced demand by raising the price of housing," he said.
Aside from rising interest rates, American homeowners have also been buffetted by rising energy prices as the economy shows signs of cooling.
The government also issued a sharp downward revision for its May figures, to show new home sales of 1.166 million rather than 1.234 million initially estimated.
The median price of a new US home meanwhile dropped 1.6 percent in June to 231,300 dollars from the prior month.
On Wednesday, a separate report from the National Association of Realtors showed existing home sales fell 1.3 percent.
BUYER BEWARE!!!!!!!!!!!!!!!!!!!!!!!!!
In a way I think the report is very promiseing and positive. That it shows the consumer may be getting smarter. Why do I think this, well here is why. First the homes being built are way over priced for what you are getting. Here in Colorado the average home is around 235,000. This is way to much money to have a view of your nieghbors siding or bathroom window. These homes are being built right on top of each other. For instance in a new little hooitie tootie suberb that is being built near highway 8 and 285. These homes are huge and beuatiful, yet in the upper 6 digits to 7 digit figures on the price they do not have even one acre of property to sit on. Now for this price you need to have at least one acre of land to sit this mamoth home on.
Next lets look at these socalled affordable mortgages. The interest only loans that end up with a massive balloon payment that is sending many people into forclosure. First the consumer is learning that this may be attractive in order to get into one of these overpriced cheaply built homes, yet after the first five years coming up with the 30 to 40 thousand dollar balloon payment is murder. A subnote to forclosures .... many below market mortgages that were handed out to minorities on special programs to attract illegals and other immigrants into becoming home owners was nothing more then a sceme to steal money from uneducated people who are now looseing their homes.
Finnally I would hope and like to think that the consumer is wiseing up to how cheaply these homes are being built. So many contractors are upping the price yet cutting more and more corners. How they are getting away with this is astonishing as I thought inspections were to be conducted at certain points during construction to prevent this. Obviously the inspectors are not doing their job. The use of cheaper materials, lack of quality and skirting codes are being deliberatly done. This being said here is the story on the homes.
Glut of unsold new homes across US hits record high
http://www.breitbart.com/news/2006/07/27/060727164635.phgh289u.html
The glut of brand new unsold homes for sale across the United States hit a record high in June, a government report showed, as some economists warned of a worsening market in coming months.
The latest data appeared to confirm a cooling trend in the housing market, following a boom and sky-rocketing prices of recent years that have priced many hopeful new home owners out of the market. In recent months, a steady rise in interest rates hikes has prompted a downturn in home buying.
Sales of new US homes declined three percent in June to a weaker-than-anticipated annualized rate of 1.131 million units, the Commerce Department said Thursday.
The drop in new home sales was steeper that most market-watchers had expected. Wall Street economists had only predicted sales to decline to 1.164 million units.
Analysts also zeroed in on the inventory of unsold new homes which leapt to a record high last month.
The government said the inventory of unsold new homes on the market rose 0.7 percent in June to a record 566,000, representing a 6.1-month supply of brand new homes at the June sales pace.
Most of the unsold new homes are located in the south of the country, the report showed.
Apart from a slight one month drop in the inventory in May, the stock of unsold new homes on the market has risen steady over the last 12 months.
"Many individuals, who signed a (purchase) contract in what they had believed was a booming housing market, may now be backing out of those contracts," said Phillip Neuhart, an analyst at Wachovia Securities.
"Thus, the new home market is likely weaker than new home sales reflects. We expect both existing and new home sales to continue their slide throughout
this year and the next," Neuhart said.
Some analysts are calling for a bursting of what they see as a property bubble and the report could exert fresh pressure on the Federal Reserve to pause its cycle of rate hikes.
The home sales market has been one of the key pillars propping up the world's largest economy, and while inflation is rising, the Fed will not want to jack up interest rates too much and risk a property market crash.
New homes sales across the United States have now fallen 11.1 percent compared to June 2005, and as the federal funds interest rate has risen to 5.25 percent.
"This was a weak report," observed Patrick Newport, an economist at Global Insight.
"Our view remains that sales will continue to slow over the course of this year and into next, because higher interest rates and rising home prices have reduced demand by raising the price of housing," he said.
Aside from rising interest rates, American homeowners have also been buffetted by rising energy prices as the economy shows signs of cooling.
The government also issued a sharp downward revision for its May figures, to show new home sales of 1.166 million rather than 1.234 million initially estimated.
The median price of a new US home meanwhile dropped 1.6 percent in June to 231,300 dollars from the prior month.
On Wednesday, a separate report from the National Association of Realtors showed existing home sales fell 1.3 percent.
BUYER BEWARE!!!!!!!!!!!!!!!!!!!!!!!!!
