Bill stops game and geek talk, tells us about the housing market

You know I like Bill. I put more value in his views and reviews of games and the gaming industry than any of the supposed major gaming sites. He doesn’t say a lot, really, but what he says is usually dead on. So when he skipped the gaming talk one day last week and decided to talk work, numbers, and the housing market, I figured it was worth the 5 minutes it would take to read. Turns out that was well spent time, in my not so humble opinion.

Probably the most-disputed segment of the economy right now is housing. There was a massive housing boom in this country that lasted for years. It created so much additional liquidity in the economy, both from people selling their homes for a profit or taking out home equity loans, that it took on a life of its own. And like most booms, toward the end it was being sustained by all kinds of dubious tactics–most notably, the gigantic increase in sub-prime and “alternative” loans.

. . .

So as the housing market slows, people are still in severe denial that any of this is really a problem, and they’re desperately wanting to claim that the bottom has already been reached (short version: it hasn’t). Here’s what came out this morning:

Sales of existing homes fell in December, closing out a year in which demand for homes slumped by the largest amount in 17 years… For the year, sales fell by 8.4 percent, the biggest annual decline since 1989…

There has been data coming out in this vein for almost a year now, and every time it does, realtors immediately claim that the market has bottomed. I read some of the most bizarre, amazing explanations from the realty industry. Here’s today’s gem from the realtor’s “chief economist”:

David Lereah, chief economist for the Realtors, said that even with the December setback, he still believes that sales of existing homes have hit bottom and will start to gradually improve.

And I’ll leave it to either of my readers to go read the rest. I’m also sending this to my brother. He’s been talking about buying a house for a couple of years now, but has held off because he’s not sure the market will keep improving. Now it looks like he may have been right.

So, does that make any of you reconsider your near future housing plans?

[tags]Bill talks on housing, The improbable numbers the realty experts share[/tags]