Strong Economy, Weak Housing Sector

justme · #11 (**permalink**) 09-05-2007, 05:32 PM

Quote:

Originally Posted by oceanbreeze

I know.

We live in AZ where the builders got greedy and expected an influx of CA residents to come rolling in, in return the locals bought up the houses expected to turn a huge profit, CA didn't come, homeowners can't afford 2 mortgages, now have to rent it out, way below what they originally paid for the house. Common get rich greed at work.

Here, they had a rash of people buying condos with the intention of quickly flipping them. They just did a story on a local couple that mortgaged their house to the hilt in order to purchase 4 condos at pre-construction prices.
Condos were finished just as the housing slump hit. No buyers, unable to use their house as an ATM anymore. They are in the process of losing everything.
Their home value has dropped way below their mortgage. Lenders won't work with them.
Its sad, but these are educated adults who saw a chance to make a quick buck.

Cookie Parker · #12 (**permalink**) 09-05-2007, 07:07 PM

Quote:

Originally Posted by justme

Here, they had a rash of people buying condos with the intention of quickly flipping them. They just did a story on a local couple that mortgaged their house to the hilt in order to purchase 4 condos at pre-construction prices.
Condos were finished just as the housing slump hit. No buyers, unable to use their house as an ATM anymore. They are in the process of losing everything.
Their home value has dropped way below their mortgage. Lenders won't work with them.
Its sad, but these are educated adults who saw a chance to make a quick buck.

Television used all those shows which they still do to claim people made it rich..I'm sure some did...but those days are long over...

mulp · #13 (**permalink**) 09-05-2007, 07:24 PM

Quote:

Originally Posted by gixaholic

i am glad you posted this graph. It clearly shows the decline starting way before bush even entered office. And the uspsing is dated and is directly corilated with bush tax cuts... And the spur of economicactivity it created after the Clinton Bust and 911 ressesions...

Actually, most of the decline occurred after the tax cuts were in effect. The first tax cut was passed early in 2001 with the rebates being sent out in summer 2001. And after the 2002 tax cuts were passed, the employment rate continued to decline for another year. In other words, the employment rate declined for the first 30 months of the Bush administration with tax cuts passed six months into the administration, and then about 20 months into the administration, and then a third time within the 30 months of decline.

The rate declined for the first year of Clinton's administration but then started rising without tax cuts, but instead with a budget that moved toward balance and then surplus.

It seems to me that the increase in employment rate is better assumed to be part of a natural cycle with the Bush tax cuts having no real impact or Clinton's move toward a budget surplus. And that would mean that the economy rose as part of a normal business cycle and not because of the tax cuts.