Dramatic Drop in Home Prices Continues

[Michael Larson]

Clear Capital Reports Sudden and Dramatic Drop in U.S. Home Prices

Clear Capital issued a market alert Friday after identifying what the company called a “dramatic change” in U.S. home prices.

The company says this significant drop in prices, in advance of the typical winter housing market slowdowns, “paints an ominous picture” that will likely show up in other home data indices in the coming months.

Clear Capital gathers market data on home prices in near real-time and as a result, reports its analysis ahead of other industry gauges (typically two months in front of other indices).

[Tim Spargo]

I know that Freddie has been dropping prices to meet appraised prices to salvage the deal. Not sure about Fannie and HUD, it may be.

Either way, it's concerning to hear we're still on a *downslide* when I just heard MSNBC tell me this morning that the economy is doing much better.

[Gary Farnsworth]

And home inspection fees are sliding downward along with the home prices. Appraisers are actually the ones controlling home prices; not the economy, sales figures, or buyers. There are many stories of RE transactions that are failing due to appraiser results. One just recently involved a home I inspected where a buyer, a home owner, and RE all agreed on a price, all dots and t's where crossed, but the appraiser valued the home over $20K less than everyone's agreed price. Even the lender was surprised. Now, the current owner can't sell, his next home deal has fallen through, the new buyer has to find another home, all of the processors involved have lost their commissions; basically a trickle down effect. Appraisers are gun-shy. They once were soft, now they are tough. Same with mortgage companies. We all should also be tough, thorough, and not stoop to SOP's and state laws that permit us to check limited items.

[Bob Elliott]

All these low prices are great for business.

[Christopher Currins]

It's a little ironic, 3 of the last 4 homes I inspected were new construction that had just been completed; in the $300.000 - $400.000 range.

[Nick Gromicko]

All these low prices are great for business.

Correct. Anything that shakes up the market is good for inspectors.

[Bob Elliott]

Originally Posted by gromicko

Correct. Anything that shakes up the market is good for inspectors.

Complaints about fees are on the inspector and not the market.

[Gary Farnsworth]

Here in KC, it is the market. Check my web site. Read my newsletter and pages of information that I put out there that explain the differences in cheap inspectors.

You can get any size home, any age, any condition, inspected here with termite for $249.

I am not even getting any calls to explain the difference. Neither is Dan Bowers. I am lucky to have had 6 inspections all month; all referrals from past clients. It is hard to pay bills and eat with that income.

It is not easy here in Kansas.

[Joseph Burkeson, CMI]

Should You Be Worried About Deflation?

Last month, I followed up on a discussion I began in over a year ago as to why hyperinflation would be a very unlikely scenario in the U.S.

In summary, this devastating scenario is a virtual impossibility despite the printing frenzy by the Fed because the banks have held onto most of this newly printed currency, keeping it out of the hands of consumers. I discussed this fact over a year ago when I first debunked the deflation myth.

Excerpt: http://www.marketoracle.co.uk/Article23728.html

[Michael Larson]

Geither, Bernake and the Federal Reserve are absolutely terrified about the possibility of deflation and are desperately trying to bring about inflation will the few tools they have left.

Let's just say, it's not looking too good as they are repeating the mistakes Japan made almost 20 years ago.

Forecast: bumpy all the way to the cliff edge followed by a free fall and a rough landing.

Get your parachutes ready.

[Bob Elliott]

All this stuff is micro worry.
It balances out in the end.(big picture)

[Michael Larson]

Originally Posted by belliott

All this stuff is micro worry.
It balances out in the end.(big picture)

Bob,

Illinois is in such poor shape I wonder why anyone stays.

It is probably time you consider a move.

[ldapkus]

Originally Posted by mlarson

Bob,

Illinois is in such poor shape I wonder why anyone stays.

It is probably time you consider a move.

Don't leave your basement hideaway Bob. Stay put.

[Bob Elliott]

Originally Posted by mlarson

Bob,

Illinois is in such poor shape I wonder why anyone stays.

It is probably time you consider a move.

Mico worry.
You spend so much time with worry I am guessing you are a bald man like Linus.
What you focus on becomes your reality.
Serenity to not worry about what you cannot change is what you need.

[Michael Larson]

Originally Posted by ldapkus

Don't leave your basement hideaway Bob. Stay put.

Just a gentle warning.

You guys are in trouble.

With Pork Like This, No Wonder Illinois is Bankrupt

At a time when the State of Illinois has no money to pay local schools, no money to pay its vendors, no money to pay Medicare providers and no money to pay social service providers, it is not the time to lay concrete just for the sake of laying concrete. Heck, if construction spending is so necessary, there are any of 100 projects that actually need to be done compared to this expenditure for mere style considerations.

Even now, Illinois keeps spending itself into a ditch. Politicians are saying there’s no place to cut and we absolutely need tax hikes. Even now they say “the children” will suffer without a tax increase. Yet, they can’t help themselves and fund projects like this instead of funding already budgeted operations. Or better yet, spending money on priority items instead of lavishing cash on “nice to haves”.

A closing note, Illinois still have not solved it’s budget deficit. This year, the deficit stood at about $13 Billion. Because of stunts like this, next year’s budget deficit is already looking to be around $17 Billion (assuming nothing major happens between now and June). A brief note to Illinois politicians, “It’s time to stop digging.”