.RJ Wrote:So you spent $20k in interest to save $4000 in taxes.

Brilliant!

.RJ Wrote:But you could've rented it for less than $3000 ($1400 + $1600 interest)

Quote:NEW YORK (CNNMoney.com) -- The biggest plunge in new home prices in 37 years was not enough to revive October sales, according to the government's latest reading on the battered housing and home building markets.

The sales pace for October was well short of economists' forecasts. The Census Bureau's latest report also sharply cut back on its earlier estimates for sales in August and September, when a meltdown in mortgage markets kept many potential buyers from getting the financing they needed.

Also depressing sales and prices was a record 191,000 completed new homes on the market that have not yet been sold.

The report showed that the median price of a new home sold in October plunged 13 percent from year-earlier levels to $217,800. It was most severe year-over-year drop since September 1970, when the median price was only $22,600, or less than the cost of a typical new car purchase today.

And the price figure may actually be underestimating how the bottom has fallen out of prices in recent months. Most builders are trying to support prices by offering to cover closing costs or by adding free features on new homes.

"We've gone beyond the stage where some of those incentives can work," said Mike Larson, a real estate analyst with Weiss Research, an independent research firm. "We're into the stage that home builders have to cut prices to move inventory."

Larson said he's encouraged that builders have cut back on new homes in the pipeline, which allowed for the overall inventory of new home for sales to decline slightly, even as the number of completed homes for sale edged up.

"We're still oversupplied, but a little less so," he said.

The annual pace of sales of new homes came in at 728,000 for the month. That actually edged up from the revised 716,000 rate for September, but it's well below the original reading of 770,000 for that month. The new September sales rate represents an 11-year low, and the August reading was also revised lower to 717,000.

Economists surveyed by Briefing.com had been expecting a sales rate of 750,000 in October. The current sales pace is only a little more than half the demand seen as recently as two years ago, during the summer of 2005, when the housing and home building markets were both at record highs.

Thursday's report is only the latest sign of weakness in the housing market. On Wednesday, a separate report by the National Association of Realtors reported the weakest sales of existing homes on record despite the largest drop in prices ever.

While existing homes make up a majority of sales, the new homes report is closely watched as a more leading indicator of market strength, since those sales are recorded when a sales contract is signed. Existing home sales figures are collected at the time the sales closes, typically a month or two after the sales contract is signed.

The weak housing market has hit home builders particularly hard.

Of the nation's largest home builders, only luxury home builder Toll Brothers (Charts, Fortune 500), No. 6 in terms of revenue, has yet to report a quarterly loss in the current downturn. Analysts are forecasting a loss for Toll's just completed period after preliminary results showed a sharp drop in the number of homes sold and an even steeper decline in prices.

The five builders larger than Toll all reported much larger-than-forecast losses in recent financial periods. Earlier this month Hovnanian Enterprises (Charts, Fortune 500), the nation's No. 7 builder by revenue, reported that the sales pace during October "significantly deteriorated" in most of its markets, and its preliminary results also showed a sharp rise in cancellations. D.R. Horton (Charts, Fortune 500), the No. 3 builder, reported a smaller than expected loss last week, but that followed a quarter with a much larger than forecasted loss.

In October, credit rating agency Moody's downgraded the debt of No. 1 home builder Lennar (Charts, Fortune 500), No. 2 Centex (Charts, Fortune 500) and No. 4 Pulte Homes (Charts, Fortune 500) to junk bond status. Shares of most of the major builders were lower in trading midday Thursday. The exceptions were Pulte, which was higher, and Centex, which was little changed.

.RJ Wrote:13% off $500k is still way too much

.RJ Wrote:13% off $500k is still way too much

Evan Wrote:The problem is that in this area the real estate market is much stronger, so predicting how much the market will fall is harder than the rest of the country.

asteele2 Wrote:Nova's a really strong market for a lot of reasons.... it's not going to fall flat on it's face and become a first time home buyer free for all. Like, at all. Don't expect to see 50% cuts or anything.

HAULN-SS Wrote:

asteele2 Wrote:Nova's a really strong market for a lot of reasons.... it's not going to fall flat on it's face and become a first time home buyer free for all. Like, at all. Don't expect to see 50% cuts or anything.

Not to mention, most stats i've seen show it was actually devalued for a long time, so any correction is not going to be to pre-boom market levels, unless there was an overcorrection.

Evan Wrote:where is mikey's graph where he plotted avg home price vs salary?

Evan Wrote:edit: wtf, why is my post above his?

asteele2 Wrote:

Evan Wrote:edit: wtf, why is my post above his?

That kinda fucked me up, too.

The housing market is notoriously hard to predict. All the data you could dig up could say that the value of houses here is unprecedented. I'm going to stick, w/relatively little data, with my assumption that prices here aren't going to crunch very much, though. Call it a hunch.

Ninja Edit - I found this interesting (top more than bottom ):