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Old 07-27-2009, 08:45 AM
 
1,983 posts, read 6,939,823 times
Reputation: 412

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Old 07-27-2009, 08:59 AM
 
1,928 posts, read 3,092,956 times
Reputation: 922
Prices continue to fall so I guess all is good in real estate world!!
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Old 07-27-2009, 09:17 AM
 
1,928 posts, read 3,092,956 times
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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?
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Old 07-27-2009, 09:30 AM
 
505 posts, read 1,610,832 times
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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.
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Old 07-27-2009, 09:42 AM
 
Location: New Jersey
2,079 posts, read 4,464,977 times
Reputation: 1529
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)
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Old 07-27-2009, 10:51 AM
 
364 posts, read 760,207 times
Reputation: 100
Quote:
Originally Posted by tallguylehigh View Post
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%??!!
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Old 07-27-2009, 11:08 AM
 
Location: St Paul, MN - NJ's Gold Coast
5,256 posts, read 12,461,964 times
Reputation: 3125
Florida via North East it seemed,
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Old 07-27-2009, 11:10 AM
 
744 posts, read 1,281,680 times
Reputation: 182
Quote:
Originally Posted by tallguylehigh View Post
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.
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