US home prices rise 12.2 percent, best in 6 years

[Dittohead not!]

[h=1]US home prices rise 12.2 percent, best in 6 years[/h]

WASHINGTON — U.S. home prices jumped 12.2 percent in May compared with a year ago, the biggest annual gain since March 2006. The increase shows the housing recovery is strengthening.

The Standard & Poor's/Case-Shiller 20-city home price index released Tuesday also surged 2.4 percent in May from April. The month-over-month gain nearly matched the 2.6 percent increase in April from March — the highest on record.

Good news!

OK, time for the Democrats to tout Obama's economic policies for the recovery, and for Republicans to say it isn't good enough and has nothing to do with Obama anyway.

Commence.

 

[MaggieD]

[h=1]US home prices rise 12.2 percent, best in 6 years[/h]


Good news!

OK, time for the Democrats to tout Obama's economic policies for the recovery, and for Republicans to say it isn't good enough and has nothing to do with Obama anyway.

Commence.

If you give credit to President Obama for the artificially low interest rates and the foreclosure market winding down, then Obama's your guy. 'Course if you believe that a 12.5% jump in real estate values is the beginning of yet another bubble? Be my guest.

 

[Fisher]

If you give credit to President Obama for the artificially low interest rates and the foreclosure market winding down, then Obama's your guy. 'Course if you believe that a 12.5% jump in real estate values is the beginning of yet another bubble? Be my guest.

It is going to feed the bond bubble, but whatev's. As someone who invests in real estate, I won't complain as to the market rebounding--it is why I have been putting money in on the low--so daddy can sell on a high.

 

[head of joaquin]

If you give credit to President Obama for the artificially low interest rates and the foreclosure market winding down, then Obama's your guy. 'Course if you believe that a 12.5% jump in real estate values is the beginning of yet another bubble? Be my guest.

Artificially low as opposed to the "natural" interest rate? What's that? Some ideal number floating inside von Mises' head?

 

[MaggieD]

Artificially low as opposed to the "natural" interest rate? What's that? Some ideal number floating inside von Mises' head?

You think we're looking at free-market interest rates? We're not. They're being kept artificially low as the government helps the banks, presumably, get well.

 

[head of joaquin]

[h=1]US home prices rise 12.2 percent, best in 6 years[/h]


Good news!

OK, time for the Democrats to tout Obama's economic policies for the recovery, and for Republicans to say it isn't good enough and has nothing to do with Obama anyway.

Commence.

Generally, if you avoid the weirdness of failed conservative economic policies (like austerity) an economy of our size and diversity is going to recover from a recession. It will do it sooner if you use lots of stimulus, but even the minor stimulus Obama was able to pass over the squawking crows of the Republicans in Congress was good enough from moderate growth and the slow recovery of the housing market.

 

[head of joaquin]

You think we're looking at free-market interest rates? We're not. They're being kept artificially low as the government helps the banks, presumably, get well.

You use the term "free market" interest rates as if that's meaningful. I'd love to have you define it without reference to money supply.

This ought to be fun.

 

[MaggieD]

You use the term "free market" interest rates as if that's meaningful. I'd love to have you define it without reference to monetary supply.

This ought to be fun.

Oh, crap. You caught me. I can't do it.

Smarty Pants.

 

[imagep]

You think we're looking at free-market interest rates? We're not. They're being kept artificially low as the government helps the banks, presumably, get well.

Historically (as in long term, like thousands of years), the return on passive savings has been zero or less. When the caveman tried to "save" the berries he picked or the mastadon that he killed, by burying them in the ground or hanging them from a tree limb, as every day passed, they became less valuable to him as they deteriorated or were eaten by vermin. Even 100 years ago, when the farmer tried saving his grain in a silo, he lost some every day to vermin and rot.

If there is such a thing as "natural" rate of return on passive savings, it would be most likely a negative rate. Passive savers are not in any way entitled to "money for free", and we should be thankful that we get any rate of return for the money that we save.

Being able to get any interest from savings is really a modern day banking invention, and not "natural" by historical standards. These days we just somehow wish to believe that "through the power of compound interest" we should be able to put our savings into a bank account and it should rapidly grow in value with no real effort or productivity on the part of the saver. I think that is more wishful thinking than anything. Or maybe it is this entitlement feeling that has swept over our nation, we think that we just deserve to make money on our savings, even though we are doing nothing productive with that savings. Dang, I think it's just darn good to get any return on unproductive savings, let alone this mythical high rate of return.

That said, money isn't wealth, it's just a temporary store of value, a means of accounting, and a means transaction. Our modern (fiat) money has no intrinsic value, and is not productive in and of itself. We don't even have a need for savings as a source of lendable funds, our guberment can print ample enough money and distribute it through our commercial banks, to fund every credit worthy loan. Most money is created by the fed, basically out of nothing, and the last time I checked, there was no shortage of "nothing".

 

[MaggieD]

Passive savers are not in any way entitled to "money for free", and we should be thankful that we get any rate of return for the money that we save.

When a bank takes my money and loans it to people to buy homes at anywhere from 4 to 9%, I'm entitled to a return on that money. When a bank takes my money and invests in the stock market, derivatives, whatever? I'm entitled to a return on that money.

If I gave you my car and let you use it for three years, I'd expect you to pay me for its use. Same thing.

 

[Grand Mal]

[h=1]US home prices rise 12.2 percent, best in 6 years[/h]


Good news!

OK, time for the Democrats to tout Obama's economic policies for the recovery, and for Republicans to say it isn't good enough and has nothing to do with Obama anyway.

Commence.

Does this mean a house in Saginaw is worth more than a 2005 F150?

 

[imagep]

When a bank takes my money and loans it to people to buy homes at anywhere from 4 to 9%, I'm entitled to a return on that money.

Why? See, you just proved my point about entitlement. People think that they should get something, even if they are not being productive. The only thing you are entitled to is whatever deal you work out with your bank. If thats the service of them holding your money, in exchange for their right to temporarily lending it to someone else at a profit, so that they can cover their operating cost and possibly make a buck or two for the non-passive investors, then so be it.

fWhen a bank takes my money and invests in the stock market, derivatives, whatever? I'm entitled to a return on that money.

You are only entitled to the best deal that you can negotiate.

If I gave you my car and let you use it for three years, I'd expect you to pay me for its use. Same thing.

Sure, and if I told you that I couldn't pay you any money for the use of your car, and you still agreed to lend it to me, then you shouldn't expect me to pay you, you should only expect whatever we mutually agreed upon. No one is forcing you to lend me your car, or for you to put your money into a bank account. You would only do those things because you chose to.

 

[MaggieD]

Why? See, you just proved my point about entitlement. People think that they should get something, even if they are not being productive. The only thing you are entitled to is whatever deal you work out with your bank. If thats the service of them holding your money, in exchange for their right to temporarily lending it to someone else at a profit, so that they can cover their operating cost and possibly make a buck or two for the non-passive investors, then so be it.




You are only entitled to the best deal that you can negotiate.


Sure, and if I told you that I couldn't pay you any money for the use of your car, and you still agreed to lend it to me, then you shouldn't expect me to pay you, you should only expect whatever we mutually agreed upon. No one is forcing you to lend me your car, or for you to put your money into a bank account. You would only do those things because you chose to.

I don't disagree with anything you've said here.

 

[imagep]

I don't disagree with anything you've said here.

Lets keep it that way, and we can be best buddies for life!

 

[MaggieD]

Lets keep it that way, and we can be best buddies for life!

:lol: :lol:

 

[specklebang]

Much of the jump in housing prices has come from investors who are buying houses as quickly as possible while they are still below their intrinsic value. These investors have cash and that, more than interest rates or anything else, have driven this rise.

 

[imagep]

Much of the jump in housing prices has come from investors who are buying houses as quickly as possible while they are still below their intrinsic value. These investors have cash and that, more than interest rates or anything else, have driven this rise.

So inflation apparently hasn't harmed them to much.

 

[specklebang]

The prices of housing have been irrational for the last 15 years. I know you know that. Trying to tie the equity values of buildings is not an inflationary guide. What's your point? Other than you love inflation I mean. Has this made the world a better or worse place? If you bought a house between 2000 and 2007, you sure got a lesson about inflation and buying into the joys of it.

So inflation apparently hasn't harmed them to much.

 

[Dittohead not!]

Does this mean a house in Saginaw is worth more than a 2005 F150?

If the house wasn't worth anything before, then 0 + 12.2% is still zero.

 

[Grand Mal]

If the house wasn't worth anything before, then 0 + 12.2% is still zero.

Yabut the F150 might have depreciated at the same creeping rate as the US economy recovery so the prices of the house and the truck may have crossed by now.

 

[austrianecon]

Generally, if you avoid the weirdness of failed conservative economic policies (like austerity) an economy of our size and diversity is going to recover from a recession. It will do it sooner if you use lots of stimulus, but even the minor stimulus Obama was able to pass over the squawking crows of the Republicans in Congress was good enough from moderate growth and the slow recovery of the housing market.

This makes no sense.. 3 facts.

Obama's stimulus was passed and spent in a Democratic House and Senate.
Obama stimulus ended 2 years ago.
We are 8 months into austerity and the sky isn't falling.

 

[Dittohead not!]

This makes no sense.. 3 facts.

Obama's stimulus was passed and spent in a Democratic House and Senate.
Obama stimulus ended 2 years ago.
We are 8 months into austerity and the sky isn't falling.

A 3.7 teradollar budget is austerity?
I wonder what profligate spending would look like?

 

[CanadaJohn]

[h=1]US home prices rise 12.2 percent, best in 6 years[/h]


Good news!

OK, time for the Democrats to tout Obama's economic policies for the recovery, and for Republicans to say it isn't good enough and has nothing to do with Obama anyway.

Commence.

I think you should send a big shout-out to all those Canadians investing cash in the southern US states buying up cheap real-estate. With the average price of a detached home in Toronto averaging just under $600,000, a lot of boomers with the kids gone are selling, buying a condo, and using the balance to purchase vacation and winter properties down south.

You're welcome.

 

[austrianecon]

A 3.7 teradollar budget is austerity?
I wonder what profligate spending would look like?

Not say it is.. personally.. but HoJ and others are screaming about it.

 

[specklebang]

Lots of Canadians buying in Las Vegas. Smart move. It's warmer for one thing and even today, properties are well below intrinsic values. The only mystery is why some are buying new construction - but they are. "Used" homes are still quite the bargain.

I've dropped out of the market partly because prices are up so much but mostly because I have enough of the damn things and I'm not that ambitious.

I think you should send a big shout-out to all those Canadians investing cash in the southern US states buying up cheap real-estate. With the average price of a detached home in Toronto averaging just under $600,000, a lot of boomers with the kids gone are selling, buying a condo, and using the balance to purchase vacation and winter properties down south.

You're welcome.