I suspect that this issue -- and not cheap labor -- is the primary reason why this country insists on allowing a flood of illegal immigrants to pour across the border every year. A massive population increase is the single most effective means of propping up an inflated housing market during a period of rising interest rates.
Buy Low and Sell High - The easiest phrase to say and the hardest thing to do in real life. Housing - bubble or not - is very high. It could go higher but the phrase is not "buy high hope it goes higher." It is to buy when everyone else is selling (like today's US automotive stocks) and to sell when everyone else is buying (hello $500,000 1 bed condo in DC).
Please excuse my stupid typo in line one and another slip in my opening comment. My comment should have said "last month it was revealed that land prices in Nevada fell 47% in the fourth quarter of 2005."
yada yada yada. Watch some of the major home builders' stock prices rise 30% this year. They continue to have strong sales and earnings.
The sky is falling!
If you believe there's a "housing bubble", fine, put your money where your mouth is. If you're in one of those front-loaded mortgages, sell your house and start renting (which is the closest equivalent of "short-selling" on housing). If you have any investments in real estate, get out of them and into bonds. Whatever. And if none of that applies to you, so much the better (because there's a "bubble").
Either way, there's nothing to talk about.
Are they referring to price to annual income as a ratio?
I've signed on for two car loans and four mortgages in my life, and every time I had to provide actual pay stubs and tax forms and the like to verify income, as well as documenting my savings and sources for down payments or potential money reserves.
What kind of places are just handing out money to anyone who claims to make X dollars?
It all depends what market you are in. Here in southeastern Wisconsin, things are slightly over-valued, maybe by 5%. No biggie.
You are right, this correction began months ago.
I wish that thing would hurry up and pop already...
On the other hand, if it keeps going another 6-10 months, my wife and I will have a much bigger down payment saved up when we buy.
There's a "bubble" in certain locations around the US, but not everywhere.
Oh, and existing home sales are up...
I don't believe this. Based upon my observation of the world I live in, and my analysis of IRS "income" tables.... I conclude that "income" in this country is GROSSLY understated. Imagine that. We tax on income, but... somehow, it doesn't all get reported. I'm ready for the Fair Tax!
Anyway... the gist of the article certainly rings true. See my other posts on other similar threads. I'm not worried though... because, I asked my realtor neighbor about these negatively amortizing loans, and he said.. "Oh, those are only given to people with very high incomes who could easily manage a negative change". Ok... now I can sleep better. ;-)
As in the late 70s, the Fed is inflating the money supply to make the debt easier to pay.
That's why gold has doubled in three years.
The gold is not worth more, it's just that the dollar is worth less.
BUMP
"It is a favorite topic of many liberal economists, columnists, and bloggers"
Yes, it sure is. Even on FR.
What a dumb, realy dumb statistic. They are not comparing the same land, they are comparing all land sold. In 2004 and 2005 there were some big land deals of very expensive commerical/condominium land. Now they are comparing that to cheaper deals that have been made this year for residential developments on the outskirts of town. Certainly land closer to the strip is going to cost a heck of a lot more and sway the statistics significantly. You bubble heads spin every stat into some doom and gloom BS no matter how ignorant the stat is.
I just had to check your thread to see how you disguised your advertising link to your web site (you used the "Yada, Yada" gag this time)
The propaganda was the %47 percent drop in "Nevada land prices". It's good you provided the link, even though most won't check it out. What you left out of your propaganda was that the average price they're talking about was $376,200 per acre. Wow! We're not talking about land for your double-wide now here are we? Everyone with a brain knew that Las Vegas was speculated exceedingly high in the last 10 years. So it came down? So what? Everyone knew it would.
But the bottom line is your propaganda implies (as it has for three years now) that this is going to happen everywhere. Sorry. It won't.
By the way, anyone who pays attention to the doom-and-gloom web site you're advertising on JimRobs dime is a fool.
Eeyore is back and guess what?
There's a housing bubble and it's worse than we've heard!
LOL
U.S. construction spending rose 0.8 percent in February, double expectations, as private residential spending surged 1.3 percent to a record high, offsetting a drop in public construction, a government report showed on Monday.
Construction spending climbed to a record seasonally adjusted annual rate of $1.185 trillion in February from an upwardly revised $1.176 trillion in January, the Commerce Department said.
The increase was twice Wall Street forecasts for a 0.4 percent gain and followed an upwardly revised 0.4 percent increase in January.
Private construction spending rose 1.2 percent in February to a record $931 billion, as residential spending surged 1.3 percent to a record $666 billion. Private non-residential spending rose 0.8 percent to $265 billion, the highest level since October 2001.
An increase in private construction spending on lodging, office, health care, religious, recreational and power facilities more than offset a decline in spending on construction of commercial, communication and manufacturing facilities, the report showed.