New home sales fall to a six-month low

I thought we were already at the bottom!

Bill, is there any hope?? at all??!! what was your forecast again? 2014 until we would see any sign of recovery?

thanks for keeping us informed,
Val

starting in the late 1980s while I had my accounting practice, I got interested in demographics and the effect that the baby boomer (me) generation was having on our country's direction. By following the cycle of our monumental influence on the economy, I gave a lecture in 1991 to some of my close clients that I felt that starting in 2008 we would begin a slow down as the first baby boomers were retiring and they should make plans for that as strange as it seemed. It is a mere coincidence that that the banking crisis began in earnest in late 2008, but with the economy already slowing down on its own, the banking crisis magnified the housing slow down and now we are into a catch-22 scenario. The people are afraid of losing their job because of the soft economy so they don't look for new housing; the banks won't lend because they are still cleaning up their 2008 - now mess; so prices go lower because the demand isn't there which perpetuates the cycle. Anyway, back to the point.
With the demographics going against the economy as baby boomers retire, our current malaise is elongated as the personal consumption engine (us) is all tapped out. Due to this problem, the economy can't get any better until 2014 at the earliest and may get a whole lot worse in the mean time. I surmise that governmental interference will be the final blow as Republicans will probably cut spending at exactly the wrong time. (I lean Republican but what they are planning on doing now is idiotic) Unfortunately, in free market economies there are good times and bad times but politicians don't seem to be able to stomach that.
Unfortunately, the world is also growing it's population at a staggering rate and everybody is competing for the same natural resources. This causes an inflationary spiral at the wrong time and also hampers the growth of the US economy since increased energy cost is like an additional tax burden...except it goes to the middle east. If history is any indicator, the only way that things change is that the world friction probably ends in World War III. (Probably late 2010s and focused on resources, food,power balance) It would be an event that would jumpstart production around the world.
But as countries grow and die and since China is the rising star (much like we were in the early 20th Century...remmeber we took the mantle from Britain who took it from Spain, who took it from France, etc., etc.), I would expect that China will start to be the predominate country beginning after the war since 2 billion people (est 2020) are a force to be dealt with.
Anyway, during the next 7 -10 years, there is plenty of opportunity; you just have to be focused on doing it. I feel that real estate, if done correctly, is the best method for a lot of people. But you have to be smart and you have to be diligent in your pursuit.

Bill great insight there, but I have my 2 cents to add, and that is the markets are going to be slow for a longgggggggggg time I think 10 to 15 years to recovery, The biggest reason being is Debt, everybody has it, so more then others but there is certainly plenty, of it to go around for sure. The major govenments in the world are in Debt, its all on the world markets, we built this market on consumers backs over the years, relying on there spending to keep the engine moving growing. The avg consumer has lot of Debt, and its going to take time to get it paid down. Along with high gas prices, and property taxes, income taxes and low wages, will its going to be a very slow painful recovery for sure.

debt can only be fixed by income and jobs are the only way for most people for income. We will live in a dismal place for a decade. But I make my own future and work my plan to be above the fray.

about everything but WWIII. I realize that it's probably just a pipe dream that the world can solve it's problems peaceably but wouldn't that be nice?

I've long thought that there are just too many people on this planet for the resources and environmentalist have been saying that things like Drinking WATER are "going to be in short supply in the not too distant future" for years. Does anybody listen? We, as a people, are ripe to be lead down false paths of glory by very convincing leaders. We need to close our ears to what's being said and open our eyes to what really is happening. Thankfully, I really like Chinese food

Just my 2 cents...

Andy Sager
DG's AndyS

Thanks for the education and update. Its very interesting and perplexing at the same time. So very important to plan and prepare and have faith and not be afraid. I think things are going to get very ugly and I have so much to think about. Much to do also.

and Cub, and Andy,

very insightful information; needless to say, it is scary to be investing in re right now, but not doing anything at all scares me more.

I am learning something every day, I want to make good decisions, and I definitely want to be prepared for the next decade...

Esteanna,
I too have much to think about and much to do!

wishing everyone success,
Val

I sense your uneasiness and yes it is scarry. This is the best time to invest in real estate and if prices of homes drop more which I expect they will then thats ok. It is a good time to acquire and hold properties even if prices do drop more because if you can get several with good cash flow you will set yourself up real good for later on. Now is good to acquire property for your children too. Don't be afraid and I know that is easier said than done. As a christian I consider this a time of testing and must have faith and believe Knowing that everything will be OK.

I agree with you Bill, it's going to be a long haul for the economy to recover. All the news is bad, there is no quick fix. More jobs, less restrictions would be a start. Time to pay attention and be ready. Timing is everything. Keep that positive attitude and go foreward.

Looking forward to a great time,
Roger & out.