Re: Re: US homes sales have a stunning jump

#100502

Anonymous
Participant

The increased volume is probaby because the Banks are selling some of the millions of repos of the last 5 years!

Prices in the US (and other mature western economies are only going one way)!

http://www.telegraph.co.uk/finance/e…l-Roubini.html

Quote
“The bitter truth is that there is no way out of this with monetary and fiscal policy. They (the US) will just have to see their living standards go down. I see a decade of difficulties for the US,”

“the market for mortgage securities (CDOs) had collapsed from $1.9 trillion in 2006 to just $50bn last year, leaving the US property market reliant on federal agencies.

“The world is simply not willing to buy these dubious financial products again. Germany is leaving, China is no longer there, and Japan is pulling away. The US system of mortgage finance is on government life support and that cannot drive a sustainable upswing,”.

http://www.nytimes.com/2010/09/06/bu…2&ref=business

Quote
“the era of trying to buy stability while hoping the market will catch fire — called ‘extend and pretend’ or ‘delay and pray’ — has run its course”.

The coments below are regarding Orlando Florida but have some relevance to Spain:

With property in Florida historically not being a great investment (from a capital ‘real’ growth perspective). E.g Between 1980 and 2000 prices in Orlando stayed roughly the same. Despite prices falling throughout 2006 to 2010 (following the 2001 to 2005 boom), they are currently still well over the long term trend. (see link).

http://mysite.verizon.net/vzeqrguz/h…e/orlando.html

Property is only worth what a buyer is willing to pay and as most buyers require mortgage finance, what banks are willing to lend and currently they are not very willing. Anyone waiting for Orlando prices to return to their 2005/6 peaks will probably be very disappointed for a long time, possibly a generation.