June new home sales up more than expected; 29% rise in northeast. (real estate, mortgage)

[MoorestownResident]

MarketWatch.com Story

[bababua]

Prices continue to fall so I guess all is good in real estate world!!

[bababua]

Not to mention sales down only 11.5 percent year over year. I guess things are looking great. What happens when we actually being positive in terms of year over year? Do we all get a free get rich card?

[tallguylehigh]

Interesting news and I think it is a good sign for the housing industry.

Granted, prices are still going down, but a couple of months ago, I made an analogy of the housing market and an airplane being in a dive.

Altitude = prices
Engine thrust = sales

In the middle of a dive, even though the engines are on and you are starting to generate thrust, there will be a lag time when the plane is generating sufficient thrust but altitude is still falling. Soon, altitude will adjust, but it will lag when the engines start working again.

The engines are working, the altitude just needs to catch up.

[davenj08]

Volume increase is a useless indicator unless you pair it with Sale Price decrease. If houses are priced correctly, they will sell. If home owners are stuck in 2006-7 prices they have a long way to go. Just go by NAR's data and you will see YoY prices are down 18% in NJ. If seller's are pricing their houses 15-20% below, they will sell fast.

I am negotiating with this buyer who has listed his house 4% below 2006-7 peak. He is not going to see more traffic at his open houses unless he gets realistic.

link - http://www.realtor.org/wps/wcm/connect/dbf34f804e1087cfb8eeffec21680fb0/REL09Q1S.XLS?MOD=AJPERES&CACHEID=dbf34f804e1087cfb 8eeffec21680fb0 (broken link)

[Delphi]

Originally Posted by tallguylehigh

Interesting news and I think it is a good sign for the housing industry.

Granted, prices are still going down, but a couple of months ago, I made an analogy of the housing market and an airplane being in a dive.

Altitude = prices
Engine thrust = sales

In the middle of a dive, even though the engines are on and you are starting to generate thrust, there will be a lag time when the plane is generating sufficient thrust but altitude is still falling. Soon, altitude will adjust, but it will lag when the engines start working again.

The engines are working, the altitude just needs to catch up.

Good analogy. And what will happen if the interest rate goes up%??!!

[BPerone201]

Florida via North East it seemed,

[sholden]

Originally Posted by tallguylehigh

Interesting news and I think it is a good sign for the housing industry.

Granted, prices are still going down, but a couple of months ago, I made an analogy of the housing market and an airplane being in a dive.

Altitude = prices
Engine thrust = sales

In the middle of a dive, even though the engines are on and you are starting to generate thrust, there will be a lag time when the plane is generating sufficient thrust but altitude is still falling. Soon, altitude will adjust, but it will lag when the engines start working again.

The engines are working, the altitude just needs to catch up.

It's just supply and demand, as prices fall the demand increases and the supply decreases.

Things were moving in ways that don't make sense - prices and demand falling at the same time - because the demand curve shifted down as people woke up to the fact that there was a huge bubble in home prices. And the supply curve shifted right as people couldn't make their mortgage payments.

So now we follow the demand curve down, with decreasing prices and increasing sales until we overshoot due to the excess inventory, then bounce back to the equilibrium price.

Unless the economy takes another sharp "unexpected" leg down, then we repeat the process again.