matclone

http://news.yahoo.com/s/nm/20071127/...homes_index_dc

NEW YORK (Reuters) - Prices of existing U.S. single-family homes in the third quarter slumped 4.5 percent from a year earlier, matching a record decline from the previous period as the housing downturn deepened, according to a national home price index on Tuesday.

Big

I don't see how this is bad news as the article implies. Cheaper housing means people can afford it eventually.

If some idiot spends based on what his home is worth, then let him suffer suckers!

Big

That is a capitalist twisted way of thinking. You buy a house to live in and not to pay your bills.

matclone

As Old Tevye might sing:

A-pre-ci-a-tion!
Apreciation!

Big

It should be a supplemental issue to buying a house and not the main reason behind it. That is why I said it is a twisted way of thinking.

matclone

It's a capitalistic world, Big--as you said. Most people here don't know anything else.

skipster

A house can be anything you wante it to be. Some people look at them solely as investments. Some people look at them as homes and investments. Some people look at them as merely places to live. I have been crucified as heartless on this board for looking at a house like you do, Big, and wanting it as a place to live, in which cheaper means better. I have been told that I'm heartless and cold for having the attitude that housing will be cheaper and more accessible if prices fall.

Everything has some monetary value to it. People usually want that value to be lower when they buy it and higher when they sell it. That is not always the case, as with all investments. Real estate will not always increase in value. Is the news good or bad? Maybe that depends on whether you're buying or selling.

Big

So, then skipster why does the article portray falling prices as a bad thing? That is just twisted in my opinion.

skipster

I think the article portrays falling prices as a bad thing because it is biased. It may not be biased intentionally, but it is biased. Anyhow, falling prices can be called a bad thing because it represents the devaluation of an asset that usually doesn't drop in value. You expect your car to decrease in value, but not usually your house. Those who are trying to sell their homes may not make back the money they put into them, thus leaving them with less income to buy other things, which mean they can't pump more money into the economy.

For me personally, falling prices means that when I am ready ot buy a house, I may get a better deal. But for the economy as a whole, the downturn may mean that some homebuilders and some home sellers may have to find other means of work -- and the economic activity that came with their work may not occur.

There is a good and bad side to this, justlike there is to everything else.

The article has a negative spin because they think that will get more attention than a positive spin.

Flop The Nuts

Falling home prices are bad for people who have a resetting (ARM) mortgage, and zero or negative equity in their homes. If you're not planning on selling your house anytime soon, it's not a big deal for homeowners.

It's a great thing for home buyers though. I'm just hopeful that the government doesn't try to stop the housing crash when it happens. Most ARMS haven't adjusted yet, so we haven't even seen the beginning of the carnage.