Not one house over $750,000 was sold in July…or June…in the entire United States.
And only 1,000 homes in the entire country above $500,000 were sold last month.
The housing market has finally fallen through the ice.
I did a post in early October of 2009 (click here) that explained the bull-trap that we were experiencing in the price run-up between last summer and this summer. I even drew a clunky picture which is a sorry testament to my artistic prowess (click on picture to enlarge).
As you can see, we are now experiencing the continuation of the downside trend on the far side of the bull-trap (in red).
The government tried to delay the correction for as long as possible. Not because that was a good idea, but because they are only politicians, so all they know how to do is “something” when the correct answer was to do “nothing.”
But doing nothing doesn’t get you votes like doing something in a nation of people who don’t know enough economics to know whether something or nothing is the better answer.
Fortunately, delaying economic forces is like stopping the tide. And also fortunately, I think more and more people are educating themselves on economics and history. All of this has happened before, which is what makes it so easy to predict the future.
In silly disbelief and absolute misguided blind faith, builders continued to build new homes which ramped up the backlog to a 9.1 months’ supply from 8 months in June.
They’re still building brand new homes across from me. I’m dumbfounded.
From Mish’s blog, “Every region in the U.S. was down, and down sharply. As it stands, median new home prices were sliced 6% in July and this followed on the heels of a 4.7% drop in June. And, at $235,300, average new home prices are down to levels last seen in March 2003, down nearly 30% from the 2007 peak…with another 15% decline quite possible.”
“We are talking about $6 trillion of excess debt that has to be extinguished, either by paying it down or by walking away from it (or having it socialized).”
Obama has chosen and will continue to choose socialization so he can spread that cost out across every taxpayer in the country. He’s already created eight government programs and some home buyer tax credit incentives to do just that, but none of them are working.
Home prices are only going to go one way from here…