If the housing boom is going bust, how can sales rise? I'm glad you asked, young Skywalker. The reason that homes sales rose (month over month) is because builders are cutting prices in order to dump inventory. I read of a development in Irvine, California, where the newest home owners were paying 100,000 less than the people who bought into the development first. Can you imagine that? The house they bought a year ago is now worth $100K less! Naturally, they are suing the developers.
If you read the small print in the article, new home sales DROPPED 10.7% year over year. My prediction is that the housing market will really start to tank when people who are contemplating buying suddenly wake up and figure out that just because the house they want is for sale for 50K less than it was two months ago, does not necessarily mean that it won't be 50K less than that in two more months.
No comments:
Post a Comment