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If you don't want to read the article in its entirety (though it's short), this paragraph was what caught my attention:
"The surge in sales was driven entirely by a 23 percent increase in the South. Sales fell about 5 percent in the West and Northeast, and fell 20 percent in the Midwest. "
Cash investors concerned about the stock market and pending inflation are fueling much of the buying. I'd love to see a breakdown showing that.
The problems for the investors(and hence why I don't understand why they are doing what they are doing) are....
#1.) Inflation WILL kick in at some time based on the ridiculous amount of money being pumped into the economy COMBINED with the pending sell off of the dollar by foreign markets including the Chinese. BUT......not while there is 10%+ nationwide unemployment............which means.........
#2.) There isn't anyone to rent those those properties. This is a particularly acute problem in a place like Las Vegas where people are fleeing town and there exists an overwhelming abundance of properties for rent.
Lots of people are cheerleading for the federal government tax credit to end and stimulus payments to banks to end. I don't think its going to matter. Once the investors are out of the market, real estate prices will go in the crapper no matter what the federal government does.
Signed purchase agreements were up 34.4 percent from the same month a year earlier, and the number of closed sales was up 27.8 percent, area Realtor associations said Wednesday. But the average selling price of a house was $169,000, down from $180,000 in October 2008.
"The tax credit expiration date probably pushed sales to occur in October that wouldn't have happened otherwise," said Jeff Allen, research manager for the Minneapolis Area Association of Realtors in Edina. "Having the new tax credit should further expand the housing market." Home sales rise, but not prices | StarTribune.com
other cities same story
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