The real estate blog.

As I read the news today that the Stock Market had set yet another record, I was reminded of something Keith at Housing Panic said the last time the market took a dip at the end of February.

If you remember, the Dow had been on a tear and set a new record around 12,400. Then it dropped like a hot rock. The record was gone. It looked bad.

Keith warned -

YOU ONLY HAVE DAYS TO PREPARE.THE EPIC HOUSING CRASH IS UNDERWAY.THE GREAT UNWINDING IS HERE. THE BIGGEST BUBBLE, EL FINANCIAL MANIA GRANDE, IN HUMAN HISTORY HAS BEEN PIERCED.IT HATH BEEN FORETOLD.PEACE OUT. GOOD LUCK. FULL STOP.

I hope many of you, not because of HP but because of reality, have made the moves in your lives to prepare not just for what’s happening, but for what is to come. The Dow could go back up 500 points tomorrow (it won’t), but that’s not the issue.

Keith preaches with such conviction that even I was beginning to believe. I was losing money in the market and Salt Lake is a real estate anomaly, only months away from joining the rest of the bubble markets in doom and gloom.

Fortunately, I read another article that said when the Dow takes big dips, history has shown it always recovers within five weeks. Sure enough, it did. Keith’s prophecy the Dow wouldn’t rebound 500 points in one day was correct, but in less than two months it has recovered over 1000 points.

We’re still on very confusing economic ground. Every positive economic report seems to have a negative counter balance. One thing I can assure you is we’re not facing an economic collapse in this country. We are going through a transition period and the indicators that used to be counted on can no longer be relied on. That’s not necessarily a bad thing.

Fed President Richard Fisher agrees.

“And yet I don’t think it will pose the kind of systemic risk that we are paid to worry about. And I do think there are offsetting forces that will continue to carry the economy forward, at a slower pace, but keeping us from slipping into recession,” he said.

Consider this weeks housing numbers. Existing home sales came out pretty poorly, but were counter balanced by not great, but not horrible numbers for new homes the next day. While the number of sales were down for new homes, prices stayed up, mostly propped by builder incentives. I suppose we’re at the point where if the choice is between a new house and an existing house and the price isn’t too different, it makes sense to buy a new home. (For what it’s worth, existing home concessions are reflected on the MLS and in comparables for appraisals. I.E. if a home sold for 200k, but had 10k in concessions, it can only be used as a comp for 190k. New homes are appraised differently.)

My point is housing isn’t what it used to be in the glory days, but we’re certainly not experiencing an economic crash. The stock market is up, jobs are doing well and economic gloom and doom prophets are just plain wrong.