More than ever.. when I see a “Cheery” headline, I look for the gloomy note in it. I know it is there.

So I saw a headline about the rise in housing sales, before reading I knew the reasons why.. when foreclosures go up there will be someone out there to collect them. So naturally the quantity will rise, but the values will go down. Add the (up to) $8k tax credit being offered.

My hope is those grabbing the great deals are actually able to afford the homes they buy and don’t just create another foreclosure, and then yet again lowering the average prices. Though house prices have been completely unrealistic, back-peddling is dangerous too!

The U.S. housing market is rebounding quicker than expected, with home resales in July posting the largest monthly increase in at least 10 years as first-time buyers rushed to take advantage of a tax credit that expires this fall.

The National Association of Realtors said Friday that home sales rose 7.2 percent to a seasonally adjusted annual rate of 5.24 million in July, from a pace of 4.89 million in June. It was the fourth-straight monthly increase and the highest level of sales since August 2007.

Sales had been expected to rise to an annual pace of 5 million, according to economists surveyed by Thomson Reuters.

Sales of foreclosures and other distressed properties made up about a third of all transactions last month, down from nearly half earlier this year. In places like San Diego and Orlando, buyers are snapping up foreclosed properties at deep discounts, and real estate agents are pressing banks to release more foreclosures onto the market.

The upside there… foreclosure sales were around a 1/2 of the sales earlier this year.. now around a 1/3. So that has some  glimmer of hope.

Those sales helped drag down the median sales price by 15 percent to $178,400.

The inventory of unsold homes on the market rose to 4.1 million, from 3.8 million a month earlier. That’s a 9.4-month supply at the current sales pace, unchanged from June.

On a side note one of the homes shows I enjoy shows how oblivious home-sellers are any more about the actual value of their home. Though their home has been on the market for 6months a year or more.. they just do not think it is their sale price. Even when they are shown what the price should be, even when it is fully explained your neighbor sold for this amount and has better features in their home.. and your home still sits. ..

Many of them are upside down in their value. Most have purchased within 4-5 years ago when the prices were dramatically inflated, and since over the years, they saw house prices dramatically rising they expected it would continue, but failed to observe the current trends (foreclosures, economy, obama, etc). So sadly they they list their home for either what they actually owe, or for a tiny profit.. and the really sad part is when your home is not even worth what you owe!

It is sad, I never want to see someone owe more then their home is worth, but things will level off.

One part of the problem was that outrageous bubble, it was a monstrous bubble, we saw it when we lived back on the east coast and were blown away by it. We knew what our home was worth, and we know what it sold for, which definitely were not the same number, we got lucky at that time, we know that is not the norm.

When we drive around I am stunned to see new homes being built at prices I have not seen for a decade. I also remember when we were looking for our first home,  10 years ago, we did not want to pay over $100k. The thing is most homes really, truly, are not worth more than $100-200k. I still gasp when I see homes at $300-400k, or 1/2 million or more. That is simply insane. It is unrealistic, and just shows how out of whack everything have gotten.

Maybe we need to reset all prices to the (original) Monopoly board game prices?

The prices got bloated, the square footage got bloated.. now we have a president with a bloated imagination and feeding a bloated deficit! Quick someone get a needle, suck out the air & insanity out of all this mess!

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