Letters to the Editor
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This will be fun
Yesterday Wake County NC announced that some homeowners will see a 100% increase in their property taxes because their properties have gone up 80% in 'value' in the last 8 years. Just when the the rollercoaster has hit the top of the ride and is going down the other side, is when the bright lights at city hall have decided to tax the hell out of everyone who will now see a precipitous drop in their home values.
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Affordability
The housing market put off major price reductions by selling houses at inflated prices to people who could not afford them. If the average income in the US is $50,000 then the average house has to sell for 3X that, or $150,000. We got a long way to go before the market clears. Bush and his cronies will do their best to put off the inevitable until the next Pres and congress take office.
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Wrong
The real issue comes down to the US dumping billions of dollars/week out of her economy and into Iraq. That is THE economic story.
Leoarard needs to get out his fishbowl for a few years.
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real problem
The housing crisis occurred becasue, buyers sought out loan agencies who would loan them money for a hosue they could not afford. When we bought our first house we had to put 20% cash down and have an income that would cover a required percenatge. That meant you did not buy a house until you could afford it, and you had to SAVE up the down payment or be lucky enough to have parents who wold loan you the money. Over the years we bought up. Too much emphasis home ownersip and pressure is put on young people or middle income fmilies to buy hosues before they are ready or capable to make the payments.
House have been devalued in all areas. It is mostly in areas where the values were over inflated to beign with. Where I live houses still selling wihtin 30 days, and the prices have always been stable and rising. We had a big boom in our neighborhood between 1998-2002. Houses in my neigborhood sold within 1-2 weeks as usually being bid $200-300,000 over the million to 1.3 million asking prices. These are houses on 80 x 100 ft lots. Then the houses were remodeled or torn down and a new one built. The people selling them were older people who got a nice retirement, and young couple who got a ncie BIG mortage, but they could afford it. In the last 6 months houses in our neighborhood are still selling but it takes 30-60 days instead of of 1-2 weeks, and there is no over bidding, but negotiating the price down. However the asking price has gone up.
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meant to say
" houses have NOT been dvalued in all areas.
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another trend
urban migration leading people to spend less on durable goods and more on a rental(experience and otherwise) economy because they have no spare space.
or
the rise in age of first marriage and declining birth rate leads to fewer households and other drivers of economic activity.
or
real cost differentials between urban vrs suburban living. rough numbers just on housing would pay for driving something like 400k miles or 17 yrs (20k/yr, 10yr car lifetime, boston area). YREPMV
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Downward spiral= new yoga position?
Yesterday, flying next to man who consults. In town to consult with US manufacturer of vinyl bathtubs. CO has shut down one plant already and needs to shut down more. Guy was here to "help". Discussion touched on people who got loans that shouldn't, I said, it was a Vicious cycle, as obviously NO ONE, including the bathtub manufacturer, lumber industry, contractors, mortgage brokers, banks, Home Depot, Lowes, appliance dealers etc NO ONE wanted to say STOP...
So, don't just blame the folks that should have waited, you had the MEDIA shouting how much homes were going up, how you should get in now...TV shows showing Fix Flips...making tons of money...WHY wouldn't someone not want to get in before they could never get in again income vs housing costs.
Puleeze.
YOu live in a bubble, guy who lives where houses still sell "fast".
Shoot, we have a presznit who said to SHOP...after 9/11, NOT save and grow slowly or wisely.
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And did I mention
We just got hit with a 2% 'transfer tax' on all existing home sales, thereby sucking another several thousand dollars out. If they really wanted to put the brakes on the market and crash it hard, they couldn't have done a better job. Double the property taxes and then add 2% transfer fee onto the sale. We always knew local government was pretty corrupt but they don't even bother to pretend not to be rapacious bastards anymore.
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The Bell Tolls for Vancouver
We're temporarily protected from the housing/credit collapse up here in Vancouver BC by the upcoming 2010 Winter Olympics. Whether the games will actually generate a single penny of revenue for British Columbia remains to be seen of course, but we're still in the midst of real estate speculation and condo-flipping frenzy.
I knew we were in serious trouble when they started showing no-money-down mortgage ads in the local theaters that were clearly aimed at a 20-something hipster demographic - a segment of the workforce that has trouble making RENT on a consistent basis. Our crash will come and we're basically watching a global preview unfold in front of our eyes.
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Amateur Investors
The middle class economy reads like an old episode of "The Honeymooners". Ralph sees a hot stock, buys it because some other guy made a lot of money, and gets creamed. Hope springs eternal, and Ralph starts flipping houses.
The housing market was pumped not only by low interest rates, but by speculators who were flipping houses. People were buying multiple houses. Forests, meadows and woodlands were bulldozed for these spare houses. Flippity flip. Wildlife loses habitat because Ralph got out of the stock market in 2000 and thought he'd hit the big time with tract houses.
Other people decided it was time to have a McMansion with a 3500 square foot house for two yuppies and an infant, when 1300 square feet would do. Norton decided to buy outside his means because of a no-down mortgage. To the moon!
My only hope is that the developers stop bulldozing and this trend toward McMansions goes the way of the habitat that they destroyed.