> Recall that "end of history" overly-optimistic crape?
>
> Well, this is the end of ....uh...."economic optimism," perhaps:

>
> http://www.nytimes.com/2006/10/27/business/27econ.html?_r=1&oref=slogin
>
>
>
> Robert Cohen wrote:

>> Here is sumthin very pertinent to our discussion via Drudge's
>> tabloidish page:
>>
>> Note how the story/phenomena vary between the Calif story and this
>> story
>>
>> Hey, folks, that's reality: demonstrative of the
>> perceptions/dynamics/disputations of reality.
>>
>> http://www.breitbart.com/news/2006/10/26/D8L0C4N00.html
>>
>> Home Price Drop Is Largest in 35 Years
>> Oct 26 10:12 AM US/Eastern
>>
>> By MARTIN CRUTSINGER
>> AP Economics Writer
>>
>> WASHINGTON
>>
>> The median price of a new home plunged in September by the largest
>> amount in more than 35 years, even as the pace of sales rebounded for a
>> second month.
>> The Commerce Department reported that the median price for a new home
>> sold in September was $217,100, a drop of 9.7 percent from September It
>> was the lowest median price for a new home since September 2004 and the
>> sharpest year-over-year decline since December 1970. The weakness in
>> new home prices was even sharper than a 2.5 percent fall in the price
>> of existing homes last month, which had been the biggest drop on
>> record.
>>
>>
>>
>> The price decline for new homes came while the sales pace picked up,
>> rising by 5.3 percent to a seasonally adjusted annual rate 1.075
>> million homes. It marked the second consecutive increase in sales
>> following three months of declines.
>>
>> The declines in prices served to underscore the severity of the
>> correction in the once-booming housing market, which had seen sales of
>> both new and existing homes soar to record levels for five consecutive
>> years, propelled by the lowest mortgage rates in more than four
>> decades.
>>
>> This year, with mortgage rates rising through midsummer, sales have
>> cooled considerably, with housing expected to trim more than a
>> percentage point from overall growth in the last half of the year.
>>
>> The debate is whether the slowdown will be enough to push the country
>> into an outright recession. The Federal Reserve, recognizing the
>> weakness in housing, halted a two-year string of interest rate
>> increases in August and left rates unchanged for a third straight
>> meeting on Wednesday.
>>
>> The Fed, however, gave no indication that it planned to start cutting
>> rates because of the weakness in housing, saying it was still concerned
>> that inflation remained too high.
>>
>> The 5.3 percent rise in new home sales in September followed a 3.8
>> percent rise in August and was the biggest one-month gain since an 8
>> percent increase in March. However, sales had fallen for three straight
>> months from May through July.
>>
>> The rise in sales last month was led by a 23.9 percent jump in the
>> West. Sales were also up 6.9 percent in the South. However, sales fell
>> by 34.5 percent in the Northeast and were down 6.3 percent in the
>> Midwest.
>>
>> In other economic news, the government said that orders to U.S.
>> factories for big-ticket manufactured goods, powered by a huge jump in
>> demand for commercial jetliners, soared in September by the largest
>> amount in more than six years.
>>
>> The Commerce Department reported that orders for durable goods rose by
>> 7.8 percent last month to $226.7 billion. The increase followed two
>> consecutive months of declines and was the biggest gain since June
>> 2000.
>>
>> The improvement was more than triple the 2.3 percent gain that Wall
>> Street had been expecting, but virtually all of the strength came from
>> a giant 183.2 percent increase in orders for commercial aircraft.
>> Outside of transportation, orders were up a far weaker 0.1 percent.
>>
>> In a third report, the Labor Department said the number of newly laid
>> off workers filing claims for unemployment benefits rose by 8,000 last
>> week to a seasonally adjusted 308,000. That increase was in line with
>> expectations.
>>
>> The September 7.8 percent increase in factory orders followed declines
>> of 0.1 percent in August and 2.8 percent in July. Despite last month's
>> jump, analysts believe that the factory sector is slowing under the
>> impact of a weakening overall economy.
>>
>> The economy began the year with growth at a sizzling pace of 5.6
>> percent at an annual rate but saw that slow to 2.6 percent in the
>> spring and analysts believe overall economic growth in the just-
>> completed July-September quarter slowed even further to around 2
>> percent or less. The government will report the actual third quarter
>> figure on Friday.
>>
>> For September, transportation orders rose by 27.6 percent as the big
>> jump in demand for commercial aircraft offset a 6.1 percent drop in
>> orders to automakers, who have been struggling recently under the
>> impact of weak sales of trucks and sport utility vehicles.
>>
>> The rise in commercial airplane orders had been expected, given that
>> Boeing Co. booked new orders for 175 planes, up from 30 in the prior
>> month.
>>
>>
>>
>> Copyright 2006 The Associated Press. All rights reserved. This material
>> may not be published, broadcast, rewritten or redistributed.
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>> tg wrote:

>>> Robert Cohen wrote:

>>>> I accept your point: sales are 30 percent down, but prices apparently
>>>> only slightly so far
>>>>
>>>> But won't the prices subsequently become much lower when people
>>>> actually have to move, since the average move or turnover is every
>>>> 5--7 years?
>>>>
>>>> I was very recently in Florida, and the definite message I get is that
>>>> prices are indeed falling seemingly in more than one area of
>>>> Florida--though the "percent" of price decline is ambiguous since it's
>>>> such an inherently volatile market dynamic.
>>>>

>>>
>>> I don't think prices fluctuate as much as you think, except where there
>>> is extreme speculation---which might well be the case in Florida. If
>>> you buy a house first to live in and them perhaps as a long-term
>>> investment, what matters is L-L-L, as the real estate agents say. If
>>> your neighborhood tanks, you're screwed, and if your neighborhood is
>>> poor and it gets gentrified you get rich.
>>>
>>> What happens with overbuilt condo developments in some swamp down south
>>> is very different.
>>>
>>> -tg
>>>
>>>
>>>
>>>
>>>
>>>

>>>> Of course the Florida property insurance situation has something to do
>>>> with it all too.
>>>>
>>>> I apologize to all readers for the inadvertent distorting of
>>>> prices/sales volume.
>>>>
>>>> I certainly hope my fears herein this thread sensationally expressed
>>>> are more fantasy/paranoia than the fact/reality
>>>>
>>>> We know that markets fluctuate, and a collapse in housing prices is not
>>>> an implausibilty, and whatever I post/think/fear has little to no
>>>> impact, which I suppose isn't a bad thing afterall.
>>>>
>>>>
>>>>
>>>>
>>>> tg wrote:

>>>>> The fall of the US will be because people read "sales fell" and think
>>>>> it means "prices fell".
>>>>>
>>>>> Do you actually read the stuff you post?
>>>>>
>>>>> -tg
>>>>>
>>>>>
>>>>>
>>>>>
>>>>> Robert Cohen wrote:

>>>>>> a) over-due market adjustment/correction/balance
>>>>>>
>>>>>> b) an overall coming recession
>>>>>>
>>>>>> c) an overall coming depression
>>>>>>
>>>>>> d) a domino effect into b or c
>>>>>>
>>>>>> e) collapse of the heavily debted/leveraged U.S. economic &/or
>>>>>> financial system, massive bankruptcies, mass unemployment, chaos,
>>>>>> horrors worse than one could envision
>>>>>>
>>>>>> f) healthier, rational, lessening of previous go-go growth economy
>>>>>>
>>>>>> g) the end of the affluent American way of life and return to
>>>>>> Depression mentality
>>>>>>
>>>>>> h) very many mortgage company & multiple banking company failures from
>>>>>> excessive defaults/foreclosures
>>>>>>
>>>>>> i) all the above
>>>>>>
>>>>>> The article that provokes my off-the-wall paranoia
>>>>>>
>>>>>> http://www.latimes.com/business/la-102506homes,0,2287716.story?track=mostviewed-...
>>>>>>
>>>>>> Existing home sales drop 1/3 from '05
>>>>>> By Jesus Sanchez, Times Staff Writer
>>>>>> 11:48 AM PDT, October 25, 2006
>>>>>>
>>>>>>
>>>>>> California's housing market continued to cool in September as existing
>>>>>> home sales sank more than 30%% from year-ago levels and the median price
>>>>>> posted a meager increase, according to a real estate report today.
>>>>>>
>>>>>> The statewide median sales prices for existing, detached homes rose
>>>>>> 1.8%% in September from the same month last year to $553,050, according
>>>>>> to the California Assn. of Realtors. September's price increase came
>>>>>> after the median sank in August but is still far behind the
>>>>>> double-digit gains homeowners enjoyed for several years.
>>>>>>
>>>>>> ADVERTISEMENTIn line with recent months, the pace of sales in September
>>>>>> plunged from last year, when sales were at near historic highs.
>>>>>> September sales fell 31.7%% to a seasonally adjusted, annual rate of
>>>>>> 444,780 homes, said CAR. (The figures exclude new homes and
>>>>>> condominiums.)
>>>>>>
>>>>>> Sales for the year are running 24%% below 2005 levels, said association
>>>>>> chief economist Leslie Appleton-Young. It is also taking longer to sell
>>>>>> a home, with the median number of days it took to complete a sale
>>>>>> rising to 54 days in September from 30 days in the same month last
>>>>>> year.
>>>>>>
>>>>>> "Areas that experienced a lot of homebuilding in recent years or second
>>>>>> home activity have experienced larger declines in sales and weaker
>>>>>> prices than the state as a whole," Appleton-Young said in a statement.
>>>>>> "These include Northern California, the northern wine country, the
>>>>>> Central Valley, San Diego County and the lower desert in Southern
>>>>>> California."
>>>>>>
>>>>>> Nationwide, total existing home sales last month slipped 14.2%% from the
>>>>>> same month last year to a seasonally adjusted, annual rate of 6.18
>>>>>> million units, according to the National Assn. of Realtors.
>>>>>>
>>>>>> Meanwhile, the national median sales price in September dropped 2.2%%
>>>>>> from year-ago levels to $220,000. That was the largest annual decline
>>>>>> since the NAR began tracking sales and prices in 1969. At the current
>>>>>> sales pace, it would take 7.3 months to sell the inventory of homes
>>>>>> available, according to NAR.
>>>>>>
>>>>>> "High and rising inventory [of unsold homes] is killing prices," said
>>>>>> economist Ian Shepherdson in a research note for High Frequency
>>>>>> Economics.
>>>>>>
>>>>>>
>>>>>> --------------------------------------------------------------------------------
>>>>>> jesus.sanchez@latimes.com
>>>>>>
>>>>>>
>>>>>>
>>>>>>
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