Posted on 10/27/2007 7:03:24 AM PDT by shrinkermd
Edited on 10/27/2007 7:40:24 AM PDT by Admin Moderator. [history]
Ah, but historically only one member of the household worked. Now that two work, six times the prevailing wage is the norm (since it’s actually three times the HOUSEHOLD wage, not the individual wage). So that’s what making the wife and mother work outside the home gets you - more expensive homes, and not a bit ahead.
All the news I hear is that homes are “selling” slower in most markets. Pricing of homes is another matter entirely.
Nobody is going to sell their home if they don’t have to, which will keep prices stable. Now is a great time to get that second home you’ve been wanting...check out the government websites for true bargains....
Maybe, but where those downturns as sharp as this one? I ask because I really do not remember the 80’s downturn and I seem to recall the 90’s one was mild.
Early 80's was really bad. What also may hurt a quick rebound is the banks have really tightned up the lending standards. Many people no longer qualify for the loans they were able to take out in the past. My local bank no longer makes loans for spec homes etc.
I have even contemplated buying one myself rather then go forward with the new construction scheduled to begin in Feb of 2008.
My sister is going through the same thing. Good thing she and her husband don't have to sell. What really sucks is the devoloper, Toll Brothers, is selling brand new condo's on the same street for $50-75k less than what they paid for theirs.
You’re exactly right — the rebound from this correction of the housing market is going to be very slow, because of tightened lending standards.
I keep telling people who are pooh-pooh’ing the housing downturn to pay no attention to the housing side of the issue, per se (ie, ignore all statements by realtors), and to look at only the debt side of the issue — how much money was lent out on ridiculously stupid mortgages, where that money came from, how it was bundled and sold off to bond investors, etc.
When one looks at the debt market and how the US housing market downturn is roiling the debt markets, it is VERY clear that the amount of liquidity sloshing around the world and being funneled into US mortgages, which resulted in very lax lending terms and qualifications — that money is going away and won’t be coming back. The lending standards are going to get tight, and the liquidity in the mortgage-backed securities markets is going to dry up as investors get burned and don’t come back for a generation.
Just follow the money folks. Ignore the realtors, their projections, etc. Just follow the mortgage money, from the bottom (the mortgage borrower) up to where that money comes from, through the chain of lenders from the top down, and all the while, pay attention to how the bonds were rated (Moody’s, S&P, Fitch’s) and how borrower credit ratings were shammed up (Fair Isaac & Co, FICO scores, etc).
Doing so will show you that there was an absurd amount of money from international lenders was flung at the US housing market, those lenders are getting burned (big time) because the credit ratings for the borrowers were completely ignored or fabricated, and the lenders of money to the US mortgage market are getting burned, burned badly, won’t be so eager to lend to US housing debt again.
'56 Buicks
.........and the percentage of people who own their homes continued to decline, according to a Census Department report...................
Now, take out 20 to 40 million illegals from your statistic, and run your ownership analysis again!
Would help you should mark online.wsj.com a subscription site.
I love how the NAR revises their month earlier home sales figures downward just about every month.
I wonder if there has been a shift in the psychology of all of it. Once it was the American dream to be a home owner. My observation is now that many young people (early 30s) have been shut out of the housing market for their entire adult lives. When something is so far out of your reach, eventually cognitive dissonance sets in and you find a way to convince yourself that you really do not WANT that thing. You tend to find all the negatives of having a thing that you can’t possibly get. There may now be a group of people who really don’t have that much desire to own a home because they are used to renting or apartment living and they just don’t want the responsibility of home ownership and upkeep. They don’t enjoy or relate to fixing things up around the home, decorating it, etc. Many young men can do anything with a computer but hardly know how to hang a picture on a wall. Many young women have great careers but little time for fussy homemaking stuff. Also the demand for all those great big houses might be changing as young people have no need for bedrooms for the nonexistent kids.
I agree. If we were in a deep recession (which we're not), then I would predict doom and gloom. But the economy is still in good shape. From my perspective I would say that many buyers are simply waiting for a rock-bottom price. When they don't get one, they will start buying again.
i wonder what it says about each of us, that I was going to find a picture like this if I didn’t see it in the thread...
This country has never seen homeownership levels this high. The industry, pushed by government, increased the levels of “minority” homeownership to all time highs...and now we’re seeing, through this BS “foreclosure crisis” a weeding out process whereby some (this process is playing out across the spectrum of homebuyers...high wage earners v. low-income, owner occupants v. speculators, etc...) markets are affected more than others. This scenario has played out time and again.
In order for mortgage companies to stay alive, people with assets able to put down 3-5% will always be able to buy a home. Mortgage companies have’nt forgotten how to make money.
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