Letters to the Editor
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Republicans?
The National Assoc. of Realtors must all be republicans, who always blame everyone else for their problems and the problems they caused others.
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Realtors should look to Wall Street
Realtors should adopt the language of Wall Street, where it's said to be 'profit taking' when prices fall. It's not too late to jump in!
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"Overall health of the economy"
That's because that phrase is essentially a lie. The overall health of the economy, when touted as good lately, has been about overall GDP and other indicators that blend the rich getting richer with the poor getting poorer and the middle class losing ground. Middle class income has lost ground over the last 8 years and those are exactly the people that'd be buying houses otherwise. If he wants to be pointing fingers, he should be yelling at the wealthy for not using their Bush-Tax-Cut-Wealth to buy 4th and 5th homes.
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The problem is financing....
I am trying to buy a home and the issue is that 3 years ago, they would hand any moron money and now they have no desire to part with it. I am trying to buy a 2 family but they will not give me income credit for the 2nd unit. So they will give me $350K for a single family but refuse to give me $450K for the 2 family despite the fact that half of that second value (in monthly payment terms) is covered by the second unit. It defies all logic and what is worse, if you understand the tax implications, for every $20K of income from the second unit not counted, it has to be made up by almost $34-$38K in earned income. So if you want to blame anything, it is the hangover from the sub prime orgy of the last 5 years.
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Psychological factors
I guess you could call it a psychological factor that paying over 75% of net income on a mortgage alone doesn't appeal to most buyers.
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A more fine grained analysis
Is that suburban communities which are satellites to vibrant urban areas continue to do well whereas homesales in exurban or rural areas not connected to an urban economy are stagnating. In other words it pays as it always has, to live near the 100 largest cities. Of the 50 largest cities nearly all of them show high single figure or double digit growth.
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Make it even more basic.
At least where I live, the number of homes being built vastly outstrips actual growth in population.
I don't know how many homes these people think that the average American ought to own, but from the number of developments which have popped up around my relatively small town, the answer seems to be roughly six.
Because new houses are shinier and more interesting, people buy them and not the older ones, despite the fact that the older houses in town are much less likely to be blown over by a stiff breeze and are actually reasonably priced for the local economy.
How long does the real estate business think it can keep ignoring the laws of supply and demand? Either the old houses have to go, new building has to slow down, or we all have to start having a lot more kids and fast.
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Do you have any data, RealName?
I'm skeptical of your claim that home prices are rising substantially in the 50 largest cities.
In Suffolk County, Massachusetts (comprised mostly of Boston), the median price of a single-family home decreased 2.9% from April 2006 to April 2007.
I'm sure data from other cities would be similar, or, at the very least, would not be showing double digit growth.
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no reason
since home prices went up for no apparent reason, why shouldn't they fall? as for me, i paid 250K for a house that would have sold for 150K five years ago. as a result, i have no money left over to buy a car, have children, go to grad school, etc. not that i could rent for less. it doesn't make sense to me how prices could have gone up so much when the population didn't.
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in real estate markets like these...
...location is EVERYTHING. Exactly a year ago, we almost bought a very cute craftsman in one of the most desirable neighborhoods in Los Angeles. That same house--as I know from direct experience--has lost just about 100K in value, give or take a few grand. But no more. We eventually ended up with something else, in an even better area, and it has probably gone down about 5% in one year.
The prime location of these two properties has limited the downside so far, and will probably continue to do so. The clear lesson is that location is always your friend, in real estate. People make fun of the notion...but it is as close to a permanent law of the market as there could be. Buy in a quality area to protect against serious loss.
Where there is very limited housing in super-prime areas, there is enough demand to limit downside potential..barring the unforeseen, of course.
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Home prices are averaged
All the numbers quoted are aggregate number. So in my parents' quality neighborhood, three homes have sold while in mine the ones on the market are languishing. So, on the one hand I agree with Anonymous above.
But on the other, I'd ask what Anonymous is doing to improve his or her neighborhood. The sad fact is, the best thing you can do to increase your home value is settle into a borderline neighborhood, put up with the break-ins and the car thefts, form a neighborhood watch, throw block parties, make the neighborhood safe for gay people, and then watch the yuppies move in and price your kids out of the neighborhood.
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Anon who is trying to buy a 2-family unit
Write up a "dummy lease" and present it to your lender. It states that you already have a family who is going to be renting the 2nd unit, to ensure the income. Just have one of your friends sign it. It's not legally enforceable by anyone except you, and so you can just tear it up after you get your loan. And hope that you get a real renter, ASAP.
Not that I would ever recommend doing anything shady. But people do it all the time. I guess that makes it Ok!!
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On second thought, don't
I had clicker's regret. Got forbid you go through with it, end up getting foreclosed, filing bankruptcy, getting my IP address somehow, and naming me in your lawsuit. If you can't afford it, don't buy it. Sorry.