Diary

Dec. housing sales plummet - you guessed it - "worse than expected"

It what is becoming a regular pattern, today we had step 1 for putrid housing sales figures for December. Steps 2 and 3 should follow shortly.
Step 1: Get bad economic news
Step 2: Blame Bush
Step 3: Say it would have been even worse if not for The Messiah

Sales of previously occupied homes took the largest monthly drop in more than 40 years last month, sinking more dramatically than expected after lawmakers gave buyers additional time to use a tax credit.

So 11 months into Obama’s presidency we have the worst drop since back when John Kerry was trying to figure out how many purple hearts he needed to collect to be considered a war hero for later political benefit.

The report reflects a sharp drop in demand after buyers stopped scrambling to qualify for a tax credit of up to $8,000 for first-time homeowners. It had been due to expire on Nov. 30. But Congress extended the deadline until April 30 and expanded it with a new $6,500 credit for existing homeowners who move.

It’s amazing how stupid these government and economist geniuses are. Any idiot could predict that first-time homebuyers swooped in early to take the scraps being offered and so by the time they extended it who cared any more?

The report “places a large question mark over whether the recovery can be sustained when the extended tax credit expires,” wrote Paul Dales, U.S. economist with Capital Economics.

Wow, that’s about as insightful as the obligatory Rob Enderle quote in a high-tech article. (I hope some of you can appreciate that.)

The big question hanging over the housing market this spring is whether a tentative recovery will stumble after the government pulls back support. The Federal Reserve’s $1.25 trillion program to push down mortgage rates is scheduled to expire at the end of March — a month before the newly extended tax credit runs out.

Last year, first-time buyers were the main driver of the housing market, but their presence is on the decline. They accounted for 43 percent of purchases in December, down from about half in November, the Realtors group said.

How could anyone without a PhD from some elite bastion of liberalism have predicted that?

Though the results missed Wall Street’s expectations, the Realtors’ group says there are signs the market is finally stabilizing.

“There is some sustainable momentum building in the housing market right now,” said Lawrence Yun, the group’s chief economist. However, he cautioned that the recovery will depend on whether the economy starts adding jobs in the second half of the year.

Stabilizing? Does that mean he thinks it will maintain the current level of worst sales since the 60s? Yeah that’s great news. And by the way, it may come as a surprise to these mental midgets, but most people want to feel they have a stable job before signing all those mortgage forms, so how is it supposed to help home sales this year if you’re hoping that unemployment might drop slightly under 10% by election time?

Despite fears that home prices are starting to fall again, some analysts still believe the worst is over.

“We do not believe it is fair to consider this a double dip in the housing market,” Michelle Meyer, an economist with Barclays Capital, wrote last week. “The recovery is still under way, but hitting some bumps in the road.”

Translation: They’re laying the groundwork for next month’s “worse than expected” report: “Gee we can’t believe people still aren’t buying homes. What’s their problem? Don’t they know what we experts predicted?”