I wrote a little script to track
sales of homes within my immediate neighborhood. This helps the treasurer of the PUD keep his data up to date without tedious and redundant audits. It scrapes the city auditor's web site for changes month to month and sends emails etc. There is some static in the list since a property will change hands in the event of a death or marriage, or with some of the duplexes, investors transferring property to an LLC structure. Thus the $0 dollar sales.
After eliminating the static, it looks like one property sold in September and zero in October. Granted, I would expect it to be slow this time of year, but in 2007, 2 properties moved in October and 4 in September.
Housing prices seem to be mostly stable in this area, but the market is way slower so who knows how long it will hold out. It seems lenders are claiming bigger spreads and only extending credit to the best debtors. My guess is that we're seeing the risk of capital deflation priced into the consumer debt market, though many analysts attribute it to panic. I had a conversation with a personal banker at local bank, and she mentioned that they avoid lending on SUVs now because the depreciation is just to high and unpredictable.
According to a report released this month, a staggering 1/5 of home owners nation wide are upside down on their mortgages now. That is to say they owe more than the house is worth! This is still largely localized though. States like Nevada where nearly 50% of home owners are upside down push the national statistic way up.
October was a month of extremes in the markets too. The most volatile in US market history. Simultaneously being the worst month in 21 years and containing the best week in 34 years. At it's trough, the S&P was off it's peak by about 40%. This was right around the time that I received a call from my mother lamenting her September statement and had to inform her that the worst isn't even reflected on that statement. Not a fun conversation. Global markets were even wilder. Some are speculating that we hit a bottom though. Of course there is no way to be sure where the bottom is until later, but I tend to agree that it's a great time for anyone with a long horizon to buy stock.
Here's the deal young people. Don't let the terror and hyperbole around these events keep you from saving for retirement right now. The best time to invest is the worst time to be invested. Sure this is traumatic for old folks who are overly invested in risky equities and don't have a long enough time horizon to recover losses, that is to say, the baby boomers who are very close to retirement and might not have time to wait out the market or those already retired. But for the rest of us, there is more profit potential in the market than their has been in twenty or thirty years. It's a once or twice in a lifetime sale on equities.
That not to say we're not in a recession. It's an interesting fact that market changes tend to be somewhat predictive (or self fulfilling). That is to say that the price of equities in the market today includes the pain or profit investors expect tomorrow. At these prices, a severe deep, and long recession is "priced in." We'll likely see a jump in equity prices ahead of the recession actually ending too (predictive market theory again). You can expect the recession to drag on through much if not all of next year during which time wages are likely to stagnate and unemployment will rise. I suspect all of this volatility is what prompted the "we don't foresee layoffs" memo at work, which of course is less than comforting. That's the big risk for the young. Hopefully we'll be lucky enough to keep our jobs.
Wishing you luck.