Recovery Hopes Surge On Record New Home Sales

Tyler Durden's picture

...Just the wrong kind of record. At just 250,000, this was the lowest annualized new home sales number ever. So on one hand you have a TV clown tell you the housing market bottomed in August 2008, on the other you have a pathological tax cheat Welcoming all to the Recovery, and on the mutated third hand (thank you Fukushima), reality continues to indicate that the biggest depression in history persists without abating.

 

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Flakmeister's picture

Splat....

 

Uh, no, you don't splat till you hit bottom....

AN0NYM0US's picture

not so fast

Naples Rises From Florida Housing Swamp as Wealthy Buyers Return

http://bloom.bg/eXvFRn

 

 

(the only thing missing from the article is the dude with the sandwich board at a busy intersection trying to sell is million dollar home at half off

66Sexy's picture

more like 'boink'

 

head hitting the roof: a.k.a THE TOP

camaro68ss's picture

growing a 3rd hand is a bitch

Harlequin001's picture

apparently it's quite easy now in Tokyo...

hamurobby's picture

On the Treasure coast, you can buy a median home for 50-70% off the 2005 highs. Honestly you can buy them (existing homes) well below replacement, not a bad buying opportunity with the baby boomers retiring. Now if they could just find buyers for their northern homes...

Flakmeister's picture

Go ahead fill your boots...

The only way real estate makes sense is if your fixed rate mortgage is hyper-inflated away while your property taxes are flat... 

 

Edit: The other possible way is do a move sideways, assuming you have a large amount of equity, replace your existing digs with something that will meet your future needs. Forget about any capital gains etc...

TruthInSunshine's picture

HOA fees in some formerly exclusive areas in Miami have risen 200% to 300% due to all the empty units in multi unit high rises (fixed costs on large buildings suck and tend not to discern as to whether the building is 90% or 40% occupied), and they weren't cheap originally.

So, not only can you not get hurricane insurance, but take the $7,000 that you were paying in HOA fees yearly before and at least double them, and then, oh yeah, add another $23,000 a year in property taxes.

Carrying costs of $30,000 yearly in just taxes and HOA fees for a oceanfront (or view) condominium that has a new real value 50% less than it did 4 years ago? It's all good.

 

Flakmeister's picture

Good point, HOA fees and the like will not deflate...

ElvisDog's picture

You're shitting me. $23K in property taxes? That would be reason enough not to buy a condo in FLA.

cornedmutton's picture

You'd really love California then as may new developments here include standard property taxes, HOA, and something called Mello-Roos, named after the two state bureaucrat assholes that drafted the legislation in 1982:

"A Mello-Roos District is an area where a special property tax on real estate, in addition to the normal property tax, is imposed on those real property owners within a Community Facilities District. These districts seek public financing through the sale of bonds for the purpose of financing public improvements and services.  These services may include streets, water, sewage and drainage, electricity, infrastructure, schools, parks and police protection to newly developing areas. The tax paid is used to make the payments of principal and interest on the bonds."

Makes you wonder the purpose of property taxes when Mello-Roos covers all the public utility infrastructure normally provided by the city.  Seems to me it's just an end-run around CA State Proposition 13 (passed in 1978) which limited property taxes increases from year-to-year.  Since they couldn't raise the rate they just came up with a new "tax" by requiring all real property owners within the district to sign on as payers for the bond that had been sold to finance the city's ongoing operations. Ta-da! No more maximum property tax restriction!

A couple of years ago I was considering buying a new home near Sacramento that included all three of these payments. The P&I on the mortgage would have been about $1,500 with an additional $700/month in tax and HOA dues. Suffice it to say, we did not buy.

The BEST part was that there was no assurance made the additional payment would go away, even if the 30-year bond was eventually paid off entirely.  And the HOA fees were projected to increase by 3~5% per year!

More here:

http://en.wikipedia.org/wiki/Mello-Roos

 

TruthInSunshine's picture

Have there been any legal challenges to Mello-Roos Districts yet?

As you are aware, just because the state does something doesn't imply it can or will withstand judicial scrutiny.

That is total bullshit.

cornedmutton's picture

Roger on the bullshit. One of the reasons we stayed away. We saw it for what it was.

I have no idea what can be done, if anything, though. To be honest, this state is so far past the point of no return, I'm not sure if it's even worth fighting anymore.

ElvisDog's picture

I got news for you - the Baby Boomers are broke or enough of them are/will be broke so they won't be buying those Florida retirement homes. I would stay away from any investment strategy that relies on the untapped wealth of the Baby Boomers.

ptoemmes's picture

Yeah, here in SouthEast Florida too: http://weblogs.sun-sentinel.com/business/realestate/housekeys/blog/2011/...

But note that they did change the way sales are reported. 

Hmmm....

Pete

 

Cindy_Dies_In_The_End's picture

Hey everybody:

Since you can't send the Tylers prostitutes, why not send them some cash for all their hard work. hit that Paypal button!

 

Seriously, our fearless Tylers have not left their keyboards because of all the trainwrecks out there, so send $20 or so today. It won't hurt and you know you want to.

 

Its either that or the red pill.

malikai's picture

I took both pills and washed em down with a shot of diesel. My tummy hurts.

andybev01's picture

I don't even give to NPR, but for you I shelled out $30.00.

when can I expect my tote bag and bumper sticker ;-)

TruthInSunshine's picture

Cindy - just a suggestion, but maybe ZH can post an anonymous method of contributing. I happen to know from experience that many people with means and resources cherish their privacy.

Kayman's picture

Cindy

How about getting a drop box.

oh_bama's picture

New home sales lower because

  • WEATHER AND JAPAN/MIDEAST SITUATIONS!!!
andybev01's picture

Crap; it's snowing again in the N.E.

slow_roast's picture

Cramer's advice is financial cyanida.

TheMerryPrankster's picture

Caveat Empire

Beware of empires - especially financial empires.

John Law Lives's picture

Anyone who regularly listens to Cramer should be taken out by natural selection.

Gene Parmesan's picture

You don't still think that natural selection is allowed, do you?

oh_bama's picture

DID HE TELL YOU THAT HIS COMMENTS ARE HIS PERSONAL VIEWS ONLY and you SHOULD NOT make investments on those comments?

DID I TELL YOU BTFD a fwe days ago???

 

defn8Dog's picture

Pongee pit death awaits those who buy on GS "conviction buy" recommendations.  

MallaKite's picture

Its a GS convicted "Buy"

oh_bama's picture

You are so mean!!

HE IS NOT AS SMART IS HE IS TRYING TO APPEAR to be but he is an  OK DUDE!!

cosmictrainwreck's picture

*error* he's an asshole. to paraphase an old saw: "ya don't have to be an asshole to be at CNBS....but it helps"

101 years and counting's picture

i've said it all along.  this is the greatest depression.

drbill's picture

No, the next time the world forgets what's real money and allows (central) bankers to control "money" via fiat, will probably be worse than this depression. That is assuming we don't all wind up in the next stone age.

And to think I used to be an optimist...

NoBull1994's picture

This is great news.  Disinflationary!  More QE, please!

depression's picture

QE-3 slam dunk  !

line up the cheerleaders !

 

oh_bama's picture

YES!! FINALLY people on this blog understand!!

BEN---QE3 PLEASE, JUST DO IT!

ElvisDog's picture

Which is funny, because QE3 would further depress home prices, because home prices are a function of monthly payments. If the sheeple's gasoline/food costs go up by 50% due to QE3 that's less money left over to make the monthly mortgage payment.

oh_bama's picture

No you are not correct~~~

 

With QE3 everything will be JUST FINE!!

And people will be living happily forever and ever!!

DID YOU KNOW anythign about finance and economics?! HAVE YOU BEEN A PROFESSOR AT PLACES LIKE PRINCETON???

 

andybev01's picture

Shhhh...use your indoor voice.

John Law Lives's picture

I wonder what the Great Chairsatan will have to say about this.  I suppose QE3 is a certainty now...

Great Chairsatan = enemy of the world

ZippyBananaPants's picture

Did anyone see Biggest Loser last night? 

Sancho Ponzi's picture

I don't recall Obama speaking last night.

MsCreant's picture

He meant Ben. I know the competition is pretty tight, so I could see where you would make that error.

No One's picture

awesome! so now the Realtors can scream "BTFD" too.

smithcreek's picture

They've been screaming that for a couple years now.  I pity the fools that jumped on the free government money.  They're only going to get more underwater over the next year.

TheMerryPrankster's picture

"There has never been a better time to buy a home than right now" said Lawrence Yun, NAR chief economist, as he tied a rope with a rock attached to it around his neck and prepared to leap off a bridge.