Reading an article from Condo Vultures, a company that packages depressed condos into investments for institutional investors. With a name like that, I guess they’re being extremely honest about what they do unlike some other people (can we change Congress’s name to “spending vultures?” probably wouldn’t make it out of committee).
Anyway, they state a very simple maxim – the high inventory of condos in the Miami area will be sold – if PRICED CORRECTLY.
Wait! You mean, a 20% overpriced home won’t sell even if the buyer gets an $8,000 tax credit? You mean iof Uncle Ben keeps rates low but the prices are still too high, they won’t sell?
YES – that’s what the MARKET is telling us. Now that Congress blew an estimated $30,000 per home on the tax credit (some reports say that 4 out of 5 buyers would have bought anyway so the 4 out of 5 people who enjoyed the credit got it as a bonus meaning the credit did not incentivize them), maybe they will learn that the only solution to a slow real estate market is the only solution that any store uses to sell stuff that few are motivated to buy –
a CLEARANCE SALE!
Read the article here.
And besides, as I mentioned in a previous article, real estate is not a leading economic indicator. It is a lagging indicator – people buy homes after they have established some security – at least in the good ole days they did.