Comments on: Home Sales Jump In February

By: michael reynolds

michael reynolds — Mon, 23 Mar 2009 19:50:59 +0000

I’m putting all my money into CEF’s — Conservative Excuse Futures. There’s going to be a huge market as conservatives generate tortured and arcane explanations for how their predictions of doom and failure were actually right all along.

At the same time I’m shorting CCRF’s — Conservative Connections to Reality Futures.

By: Trescml

Trescml — Mon, 23 Mar 2009 17:59:16 +0000

I think there are good deals in exurbs, OK deals in collar counties, and close into town prices not dropped nearly as much. It will be interesting to see if this becomes a permanent price split or not.

The news though is at least somewhat good in the fact that it takes some excess inventory off the market and that is needed long term recovery.

By: kranky kritter

kranky kritter — Mon, 23 Mar 2009 16:36:16 +0000

Ultimately, the question is what a stable sustainable rate of home sales is for our nation, based on incomes. In 1990, 3 million existing homes were sold a year. By 1995 it was up to 3.5. By 2000 it was up to 4.6. By 2005, up to 6.2, then down to 5.7 in 2006 and 4.9 in 2007.

I agree that this is better regarded as signaling a bottom than a bounce back. Where we were was an inflated place, and we all ought to accept that to a large extent. We need a new equilibrium, and can go from there. Where we were a year or two ago just isn’t relevant. We’d be fools to think or hope that the RE market can bounce back to where it was when lots ofpeople were being given mortgages to buy homes they couldn’t afford.

The best news in this story is that people are making choices to buy within their means. In large part, this is probably because very few lenders are giving out mortgages for homes that the borrowers have insufficient income to afford. That is also a good thing.