Tuesday, January 29, 2008

Real Estate Never Goes Down....except when it does

Just imagine if you had listened to the NAR a year ago and bought a house.
Oh the humanity of it all.

NEW YORK (AP) -- U.S. home prices plunged by a record 8.4 percent in November, marking two years of slowing returns, according to a key index released Tuesday.

The decline in the Standard & Poor's/Case-Shiller 10-city composite home price index was the biggest year-to-year drop since a 6.7 percent decrease in October. The November performance was the 11th straight monthly decline. The index tracks prices of existing single-family homes in 10 metropolitan areas.The 20-city composite index also was down year-over-year, falling 7.7 percent in November.

Robert Shiller, chief economist at MacroMarkets LLC and one of the architects of the index, noted that 14 of the 20 metropolitan areas posted their single largest monthly decline on record in November.

This is kind of funny though. November's record drop was the biggest drop since the record drop in...October. Come on December, I know you can beat November's record. Let's hit that 8%. With hard work and training I'm confident you can do it.

So if you had listened to the NAR and bought a $500K home last year, on average you would have lost $38,500. Plus you would have spent thousands of dollars in closing costs, taxes, fees. And of course your mortgage would have been hundreds if not thousands more a month than renting a comparable house.

But it would all be worth it right. Anything to own the 'American Dream'. Anything to not be called a 'renter'. Ewww. Gross. I hear renters have these crazy Satanic orgies and stuff. Can't be associated with those kinds of people right? No, no, no. You do whatever it takes to "OWN" your home. You go right on ahead and commit financial suicide. What's $38K when compared to being a homeOWNER? I mean come on, renters can't even paint their walls, talk about losers.


Malcolm said...

Just for s**its and giggles, I watched “Fox Business Channel” for a few days. It’s darn near criminal the way they keep trying to paint the “everything is great” story; as if denying reality will somehow prevent reality from winning out.

They had someone on there talking about how now is a “great time” to buy a home. And the talking heads, like all good talking heads, kept cheering them on.

You know, I know, anyone who comes to this type of blog on a regular basis knows: now is NOT the time to buy a house. Now is NOT the time to assume debt you have no clear way of paying.

It doesn’t matter if you WANT a new house. It doesn’t matter if you feel you DESERVE a new house. Reality exist. Reality can be denied, but reality will always win.

Self-delusion is great when you’re talking about love or poetry; but to approach finance with anything but a clear acceptance of the law of cause and effect is folly.

Ed said...

FBC does the same thing CNBC, MSNBC or CNN does. No need to get into bash Fox mode for this one.

Secured Loans said...

Hindsight is a wonderful thing! I guess the lesson is to not always take the 'experts' advice as gospel!