Tuesday, August 24, 2010

Housing: The End of the Artificial Stimulus

The National Association of Realtors (NAR) reported today that existing homes sales in July of 3,830,000 units at a seasonally-adjusted annual rate was 27.2% below the sales level in June of 5,260,000 units, and 25.5% below last July, when 5,140,000 homes were sold.  Here are some of the reports and reactions:

1. LA Times -- "Many buyers who rushed to beat the April 30 deadline to sign a sales contract were closing their deals in May and June, helping to propel the market. With many of those deals now apparently closed, the market is faced with standing on its own.  Real estate experts said the tax credits led many buyers to speed up their plans to buy houses, boosting sales this spring, but sapping demand over the summer.

A few months ago "we were getting eight or nine offers on every property, and we knew that we would have a tremendous drop-off, because it was being artificially stimulated," said Gary K. Kruger, a real estate agent with HomeStar Real Estate Services in Hemet."

2. Lawrence Yun, NAR chief economist, said “Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired. Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September,” he said. “However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs."

“Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year. To place in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years."

3. Nigel Gault, IHS Global Insight: All of the action earlier this year appears to have been driven by the tax credit. … The underlying path of housing sales is not as disastrous as July’s number suggests – we are now undershooting, as sales that would have happened now were pulled forward by the tax credit. But a sustained upturn will depend on an improvement in the jobs market, which at the moment is slowing down rather than gathering pace."

19 Comments:

At 8/24/2010 5:49 PM, Blogger Benjamin said...

Sheesh, then bring back artifical stimulus.

Listen, I don't care what we do to get the economy going. Print money and drop it out of airplanes. Dance naked in the streets. Hold Carnival in Los Angeles instead of Rio.

Advertise amnesty for drug lords if they bring their paper billions back to United States. Legalize and tax marijuana. Have Tea Party leaders smoke bunches of it.

Give Afghanistan back to Russia.

 
At 8/24/2010 6:54 PM, OpenID American Delight said...

"Give Afghanistan back to Russia."

And why not sell Southern California to Mexico? That would help federal cash flow.

 
At 8/24/2010 7:16 PM, Blogger DLittle said...

To Benjamin:

None of your "suggestions" actually create wealth. I'm going to assume you're spouting sarcastic nonsense.

The Fed. Gov't needs to be dismantled by the states and reformed to its original intent.

 
At 8/24/2010 7:34 PM, Blogger Hydra said...

Hard to say that stimulus does not work. Only that it is expensive to maintain.

 
At 8/24/2010 7:38 PM, Blogger QT said...

...dancing naked in the streets..hmnn...stimulating perhaps although not economically so...although it does have its merits of a purely bacchanal nature!

Interesting to see that the Obama admin still hasn't figured out what makes an economy run....investment. Unfortunately, this admin. & the Dims have created a climate of regulatory uncertainty. Without knowing what the rules are, how can a business invest?

Unfortunately, Dims seem to believe that government is the answer to all problems...amazing! Just spend more money and everything will be copacetic. No wonder this recovery is the slowest thing since the Great Depression.

 
At 8/24/2010 7:48 PM, Blogger Paul said...

"Listen, I don't care what we do to get the economy going. Print money and drop it out of airplanes. Dance naked in the streets. Hold Carnival in Los Angeles instead of Rio."

Hey Benji, how about you just ask your boyfriend to call of his war on capitalism?

Boehner called on President Hopeandchange to fire his economic team today. Come 2012 we fire the head nitwit as well.

 
At 8/24/2010 7:55 PM, Blogger Paul said...

"Listen, I don't care what we do to get the economy going. Print money and drop it out of airplanes. Dance naked in the streets. Hold Carnival in Los Angeles instead of Rio."

Weren't these projects all part of Obama's stimulus bill?

 
At 8/24/2010 9:10 PM, Blogger Cabodog said...

"And why not sell Southern California to Mexico? That would help federal cash flow."

I don't think Mexico would want it.

 
At 8/24/2010 9:55 PM, Blogger juandos said...

Funny how the housing stimulus crapola reminds me of cash for clunkers, both programs skewed the market...

 
At 8/24/2010 10:20 PM, Blogger VangelV said...

I am sorry to bring this up Mark but weren't you cheer-leading the data showing housing sales improving and implying that what we saw was a sign of economic improvement?

 
At 8/24/2010 10:32 PM, Blogger Irrippi said...

It looks like the end of the third artificial housing stimulus program in the past three years.

 
At 8/24/2010 11:14 PM, Blogger juandos said...

"It looks like the end of the third artificial housing stimulus program in the past three years"...

Ahhh, but there's always room for crony capitalism , right?

 
At 8/25/2010 2:52 AM, Blogger Don Culo said...

"Interesting to see that the Obama admin still hasn't figured out what makes an economy run....Unfortunately, this admin. & the Dims have created a climate of regulatory uncertainty. "

I agree the economy would never tank under a republican president and congress. We need to re-elect the republican economic genius, Mr. George W. Bush!!!

Damn the dummycrats, republicans are the ANSWER !!!!!

 
At 8/25/2010 6:58 AM, Blogger Paul said...

"I agree the economy would never tank under a republican president and congress.

Eh, the economy was doing just fine under a Republican president and Congress.

 
At 8/25/2010 7:09 AM, Blogger Paul said...

Remember all the Liberal economists declaring the country was in dire need of "targeted, temporary, and timely" stimulus?

Check. Check. Check.

 
At 8/25/2010 7:10 AM, Blogger juandos said...

"Eh, the economy was doing just fine under a Republican president and Congress...

Hmmm, I often see the whole thing coming apart starting 2007...

Gee! What happened in 2007?

 
At 8/25/2010 8:35 AM, Blogger Daniel said...

Yun is simply amazing. No matter what the data appears to indicate, he counters with a positive spin coupled with a statistic or two. While his positions are not unexpected and may well be as useful as any other, as a Chief Marketing Officer, I simply must tip my hat.

Does anyone keep score on the accuracy of these commentators?

 
At 8/25/2010 1:43 PM, Blogger marmico said...

heh q-tippy, good to see you post again. Rememember the ancient days when Perry was lucky to get 4 posters to a thread. Is it just me or is it just coincidental, that obloodyhell is back as well?

Does anyone keep score on the accuracy of these commentators?

The blogoshere gave up on the NAR spin when Lereah was put out to pasture.

 
At 8/25/2010 11:27 PM, Blogger juandos said...

"Hard to say that stimulus does not work"...

Say what?!?!

Well maybe you're right BUT if you don't see the stimulus bill as a slush fund to keep buying votes than one can easily make the case: Stimulus Bill = Epic Fail...

 

Post a Comment

Links to this post:

Create a Link

<< Home