Housing Market Tanks

A funny thing happened on the way to the end of the recession. The housing market tanked again.

Exacting buyers are upending the battered real estate market, agents and other experts say, leading to last-minute demands for multiple concessions, bruised feelings on all sides and many more collapsed deals than usual.

It is a reversal of roles from the boom, when competing buyers were sometimes reduced to writing heartfelt letters saying how much they loved the house and how they promised to eternally worship the memory of the previous owners. These days, it is the buyers who are coldly seeking the absolute best deal while the sellers are left in emotional turmoil.

“We see buyers who must have learned their moves from the World Wrestling Federation,” said Glenn Kelman, chief executive of the online broker Redfin. “They think the final smack-down occurs at the inspection, where the seller will be reluctant to refuse any demand because the alternative is putting the house back on the market as damaged goods.”

Everyone expected the housing market to suffer at least a temporary hangover after the government’s $8,000 tax credit expired, but not necessarily this much. Preliminary data from around the country indicates that the housing market began swooning last month immediately after the credit was no longer available. In some places, sales dropped more than 20 percent from May 2009, when the worst of the financial crisis had subsided.

Builders have been affected too. Construction of new homes in May dropped 17.2 percent from April, the Commerce Department said Wednesday, significantly lower than forecast. Permits for future construction dropped 10 percent, suggesting a cruel summer.

So, activity is now down 20% or so with little likelihood of much improvement in the near future. It looks like the trillion-dollar stimulus handout did not make a whole lot of difference anyway. The liberal dreamworld where government deficit spending fixes all economic ills has proven to be the extract from a drug addict's nightmare.

In other news, many banks are announcing new fees to pay for the costs of the recent bank regulations passed by the socialists who are currently running Washington.

Meanwhile, Obama spent most of the day after his windmill and unicorn speech meeting with Congressional leaders trying to force through his Cap-and-Trade fiasco to jack up energy costs through the roof.

We are so screwed.