The bursting of the bubble has began. Its time for the recession.
http://www.marketwatch.com/news/story.asp?guid=%7B2BD107D7%2D8228%2D42A2%2D8EF6%2D4D968D4EE439%7D&siteid=mktw&dist=

WASHINGTON (MarketWatch) -- Resales of U.S. homes fell modestly in November while the stock of unsold homes on the market climbed to a 19-year high, further signs that the booming housing market is slowing.



Sales of existing homes dropped 1.7% in November to a seasonally adjusted annual rate of 6.97 million, the lowest since March, the National Association of Realtors reported Thursday.

The figure was in line with expectations for a drop to 6.99 million from October's 7.09 million. See Economic Calendar.

Inventories of unsold homes increased 1.2% to 2.90 million, the most since April 1986. It represents a 5-month supply at the November sales pace, the most since June 2003.

"Housing activity has peaked," said David Lereah, chief economist for the trade group. However, he insisted, "there are no balloons popping." Read the full report.

Lereah said sales in 2005 would likely set a record of about 7.104 million and would slow only moderately in 2006 to 6.84 million, the second-best sales year ever.

Lereah said the slowdown would bring the market into better balance between buyers and sellers.

"There is plenty of strength still in housing," said Josh Shapiro, chief economist for MFR Inc., who said high prices in conjunction with moderately higher mortgage rates would put a brake on the market.

Signs of froth in the market persist. The median sales prices rose 13.2% year-over-year to $215,000. Prices have appreciated 19.3% in the West.

"Double-digit annual increases will become less common in the coming year," said Thomas M. Stevens, a builder from Vienna, Va., who serves as the NAR president.

In other reports, the Chicago purchasing managers index stood at 61.5% in December, barely moved from November's robust 61.7, indicting strong business activity in the region. See full story.

And the Labor Department said initial jobless claims rose by 3,000 to 322,000 last week, consistent with healthy job growth. See full story.

"The cooling U.S. housing sector should apply a dampener to consumer spending as 2005-2006 unfolds, but some of this could be offset by still-decent job growth," said Sherry Cooper, chief economist for BMO Nesbitt Burns.



jeff

Oh yeah babe, seen it coming for a long time now. Nothing new about that.

Here it comes... Aside from possible small bubbles, expect housing prices to fall steadily for the next few years. If the extreme predictions are correctr, expect land values to fall in half and a great number of bankruptsies as a result. Too much money is tied up in real estate right now. You can see the move is happening though as big investors are now moving into gold despite the high price. Expect Gold to hit $700 in the no too distant future as well.


PAX

I don't get why this is in war but ok. Thanks for the news.






Semper Fi SAINT. May you rest in peace.