Bad Credit Online Magazine - Daily News and Advice on Credit, Debt and Mortgage : Few consumers plan to buy homes

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September 30, 2005

Few consumers plan to buy homes

Several years of sky high real estate prices coupled with few recent natural disasters and expensive gasoline, put a rather solid dent in consumer confidence. According to Inman, "Home-buying plans sink to 10-year low".
"Consumer confidence plunged in September to its lowest level in more than 12 years, while consumer home-buying plans also fell to 10-year lows, according to the survey. The decline in home-buying plans was due to an increasingly negative reaction to high home prices, as consumers expressed in September the least favorable assessment in nearly a quarter century."

The article goes on saying that in previous 50 years, a similar sentiment would inevitably trigger recession. Last time it happened August of 1990.

We can only add the few following points:

Wait till you see the heating bills this winter. The shortage of natural gas will be severe, since most of the gas production is the areas hit by Katrina and Rita. And we have very few facilities to handle liquified gas which can be purchased overseas and transported here.

Another point is that home ownership has become ridiculously expensive. Forget the price tags on those homes. All the side expenses are very high and will increase. With $700,000 house often come $15,000-per-year real estate tax. That is another $1,200 a month. What makes the matters worse is that these taxes often are going up every year by at least 3 percent.

Association fees have gone up very steadily, especially if heating gas is included. On of the least expensive complexes in very desirable Chicago suburb boast monthly assessment of $330. The 2 bedroom condo there sells for about $190,000.

So there is no surprise in the Inman story.

 
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