Distressing Gap
More from Calculated Risk on home sales — and the ever-widening gap between existing sales and new sales:
First, it is important to remember that existing home sales are largely irrelevant for the economy. What matters for the economy are new home sales, housing starts and residential investment. And there has been little improvement in these key indicators.
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The key to reducing the overall inventory is new household formation, and the key to new household formation is jobs. Encouraging renters to become owners accomplishes nothing in reducing the overall housing inventory, and leads some analysts to mistake activity for achievement.
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I’m thinking of becoming an owner…I’ve got my eye on either the luxurious foreclosure that needs a lot of work, or the divorce house that needs to move fast, or the short sale that is priced well below market value to move it quick.
Unless the dollar goes the other way, its almost a can’t lose situation! Almost. I better get my mold inspectors in there pronto! And based on these numbers banks might start getting mean (well housing was up, so we can’t go that low…afterall, old boy, the economy’s recovering dontcha know?)
Comment by Andrew — 11/23/2009 @ 4:42 pm