Monday, September 27, 2010
The American albatross
Not an investment, not an ATM, not the American dream…but also not the underside of a highway overpass. Our houses, if we still have them, are shelter.
Nick Timraos and Sara Murray write about this in the WSJ, Sept 23, 2010.
Thousands of people out here and elsewhere cannot sell their homes without bringing $50,000 to the table. That would be the SELLER bringing the big check!
People also don’t want to buy because all indications are—better deals coming.
Sales of existing homes rose 7.6% last month. Sound good? Remember--
It will take a year just to clear the present inventory if present levels hold.
Drop the price, drop the price—that is the strategy.
Different parts of the country are different. AZ going lower. Parts of Texas and Oklahoma could be inching up.
People rent even if the rent does not cover the mortgage—beats taking a 50% haircut.
Renting out your home is a total crapshoot, one would-be seller noted.
And as more people move in with relatives or double up on households, the more houses available.
The key, of course, is jobs. If you get a job—finally—you move out of your sister’s house.
But there is also the “shadow inventory.” That is the incipient foreclosures about to come on the market.
Eleven million people are underwater. Two and a half million will join them if prices drop another 5%.
Investors and first-timers are in control. And you know who the investors are here in AZ? Canadians.