Wednesday, March 23, 2011

Homes Sales Fall to Record Low

Read this extremely important article.

Home sales at slowest pace EVER.  Prices fall to 2003 levels.  Foreclosures at 2.2 million in January 2011.

It is hard to be bullish about U.S. residential real estate.

The days of buying houses and counting on rents and property sales to carry you through retirement are long over.  American attitudes towards home ownership are changing.

Home ownership rates in the United States have peaked and likely will trend downwards for many years.

Renting is the new buying.

What is there to be bullish about in this sector?

Higher mortgage interest rates are on the way.  They sure can't get any lower.

The end of Fannie Mae and Freddie Mac will dry up LOTS of mortgage money.  Lenders can't lend what they haven't got.  Plus without F&F home prices have to fall.

The unemployment rate is going to remain high "for several years" according to the eternal optimist Ben Bernanke.  I read this as "many years."  The honest truth is that many of the jobs lost in the last recession are never coming back.

There is chaos in this industry, uncertainty everywhere.  That's not good for business and it shows.