Housing Optimism

I agree with the "glass is half full" theory. I live in Texas and it has in general done well through this period. Job growth is very good. Manufacturibg is down some but improving and job growth in technology, engineering, healthcare are doing very well. Recently housing prices started to rise here again. Texas is not immune to national economic factors. However, most of the impact to Texas has been fueled by consumer sentiment as a result of what they hear as a national crisis. Also, many of the national homebuilders, banks, and lenders in Texas are impacted by what is happenig in the regions having serious problems.
In so many cases of a crisis there is an over-reaction to. In this case the lenders and their investors went from crazy lending practices to a "no" lending practice.This has a domino affect of making it impossible for home buyers (who are not stretching) to get a loan to purchase a new home. When that loan doesn't happen, it means someone with a house to sell doesn't get to sell it. This in turn results in either a foreclosure or the seller reducing their sales price (both of which are broadcasted negatives). It use to be the goverenment was trying to figure out how provide mortgages so lower income families could purchase a home. The private sector figured out how to do this through subprime mortgages without the goverenment red tape. This is not to say they didn't go too far. But there has been a history of this within the lending industry. Remember 15% negative-am loans in the 1980's? It was crazy but we got through it. Every economic cycle I have seen, the lenders start cautiously and slowly migrate to overkill like lemmings. If one high rise condominium project is good then 20 are better. Same for apartment complexes.
What is usually reported by the media is the percentage of increase in foreclosures over the previous year. What they should report is what percentages of mortgages as a whole are defaulting. This is a number that is not that scary.
I should say in the interest of integrity that I have a medium size homebuilding company and was a commercial real estate agent before. Therefore while some of views may be skewed by self interest, they are also informed by my long term knowledge of these industries.

The problem is all the people who are in homes because of subprime loans. They shouldn't be in homes. But, subprime loans allowed them to buy. Now all the values have inflated too much and we are all nailed as it corrects to reality. Obviosly, the home loan business needs to be regulated with permanently fixed rates and terms, to allow supply and demand to operate properly on the market.

The real estate market is in such dire straits that it is and should continue to be the dominant story for 2007, 2008, 2009. It will be a long time indeed before this market straightens out.

Kind of strange that everyone wants to compare single family home values with average income especially in areas like Los Angeles. How about taking the average of apartments, condos and single family homes and then comparing them with the income? I am sure the house prices are inflated are right now. But I think that would give a better picture.

Kind of strange that everyone wants to compare single family home values with average income especially in areas like Los Angeles. How about taking the average of apartments, condos and single family homes and then comparing them with the income? I am sure the house prices are inflated are right now. But I think that would give a better picture.

According to the December issue of PC Magazine (US Cities Tech Jobs), the Average home in my city, Los Angeles costs $ 616,00. The average income is $ 47,000. Does this give you any indication about where housing markets in Los Angeles need to go?

However here are additional reasons the housing market will NEVER, I repeat, NEVER rebound.

1. While the super rich are getting richer, the wages of the have nots are going down - way down
Corporations like to say that American wages need to be ???competitive??? with the world market. That means that we should be earning as much as a telemarketer in India or Bangla-Desh. If wages are too high, corporations either outsource work, or the establish ???guest worker??? programs where ???imported??? laborer work for wages a step above slavery.

2. Young people face record-breaking, heart-breaking college debt.. In addition, 30% of the under 35 crowd work for companies who do not provide health insurance.
3. Many people must use credit cards just to survive. As a retired school teacher, I can tell you
4. Health care costs will escalate, as more companies drop insurance plans. According to the recent issue of American Prospect, the cost of a family health care policy is around $ 12,000 per year, projected to go up to $21,000 by 2013.
4. If we elect Ron Paul and/ or Mike Hucakbee and shut down public schools - families will not only have to finance college education, but K-12 as well. According to a recent Wall Street Journal Survey, the median yearly tuition for a private school in Los Angeles is around $22,000.
5. If we eliminate income tax and replace with a 23 % sales tax, you???ll need to tack 23% on to the price of the average house.. With no income tax, you will be unable to claim a deduction for interest on mortgage payments.
6. Finally, the spook in the room is global warming which is happening far faster than we previously imagined. No one in his or her right mind will buy property in low-lying areas..

For an additional reality check, I???d advise everyone to read Barbara Ehrenreich???s Nickel and Dimed. The living conditions described in Ehrenreich???s book are our collective future, including the wages and housing.. With these realities facing us, do you still think you can sell a $ 615,000 home? Lots of luck. Plan accordingly.

qestion? is his home still on the market for 1.1 million or did he take it off listing or is he ???? i thought that was a nice dodge of the fundemental issue that comparing housing prices to wages does not compute!! housing prices will countine to fall

Is there a wory when things are okay? I don't like to hear bad things anymore than anyone else, but I'd surte like to know when there is potential trouble or that what I thought was going to be trouble a long time ago turned out not be just my imagination. Yes, bad news is unpleasant, but without hearing the truth, both bad and good, we cannot avoid the same mistakes in the future, can we? Even knowing the things we have done that have been mistakes, many still do not appear to learn from mistakes. Unfortunately there appear to remain too many people who place money and wealth above all else, including their own religious faith. In this season it may be a good time to remember that many of those people pray to and revere were not those that revered wealth and riches above all else, but those that helped thaie fellow human beings, no matter how much or little they had to offer those in need. Perhaps we should take the enphasis off of monetary and wealth values and return to more humanitarian ones.

It's impossible to know exactly when to buy since the data lags the real time market by several months - the only way to know we've reached the bottom - or top - is to look back at historical data and realize prices are either lower - or higher - than they use to be. Buyers who wait miss an opportunity to purchase under very favorable supply and interest rate conditions which exist right now.

I don't understand why people keep saying it''s a good time to buy. It certainly 0appears that prices will continue to drop. Why would it be a good idea for a first time buyer, or anyone for that matter, to buy now only to have their home depreciate for who knows how long? Let's keep in mind the crazy influx of home prices over the last few years. Not only is it unsustainable, it's been fundamentally wrong. Prices went way too high and still need to adjust. Most people are still not able to afford a home in today's market. When the majority of folks are out of the market, prices have to decline. The reasons they could get so out of whack before (investor frenzy, and bad lending scruples) are virtually dried up. Prices will drop. It is not a good time to buy.

Why do we almost never see an in-depth analysis of the New York Metro area housing market whenever housing trends are discussed? Considering that something like 6-7% of the entire country lives in this one area, I think it worthy of a bigger discussion than the usual "...while housing prices in and around New York City are actually up..." The same applies to other major metro areas. Recognize that the majority of the country now lives in urban or suburban areas, and the focus of these kinds of articles should follow. As Jonathan Miller is quoted in this article, since there is no "national" housing market, a real breakdown of all the major metro areas would be more helpful and accurate to your readers.

I live in central New York and the housing prices here have not fluctuated much. I purchased a house last August, and the price was reasonable. I notice that the biggest bubbles are around perennially popular living and retirement areas. The 5 year freeze on ARM teaser rates can help the situaiton. In 5 years many of the situations will have resolved themselves and the economy will have time to recover. This will lower the damage when the resets do come through. The finance industry will have time to redo loan policies and restructure CDOs. We may not have hit bottom, but the recovery process is slowy working.

Long term things are not that bad and the media does need to focus more on the positive than negative. Yes housing prices are down from historic, record highs but you really need to look at all the factors that drove home prices up. Historic low interest rates, investors flipping real estate, relaxed lending policies; all of these were contributing factors to the run up in the real estate market. Now the market needs to adjust which it historically always does. The housing market will turn around and values will go back up, the only question is when. The sooner we start hearing more positive news than negative, the sooner we can start heading for a turnaround.