[Freedom_Is_Not_Free]

Bubble, bubble, toil and trouble, houses burn, forrclosures double.

[rb22982]

If you take "Florida" out of the south, most of it is very affordable. One thing that makes real estate harder to judge based on the last 30 or 40 years is that interest rates are so low. Borrowing 100k at 12-20% is as expensive or more expensive than borrowing 200k at 5%. Real costs of ownership are not up as high as it would appear based on value alone. The problem with the bubble was that loans were given to people with crappy credit with little/no down and just no down payments period. If you plop down $25-100k of your own money up front, you'll think long and hard before signing the dotted line.

[ikka]

Interesting article, however I would point out:

a) median home prices over many years do not take into account the larger square footage of newer houses

b) the high costs, and inflationary effects of the municipality piling fee after fee on top of the developer.

[maine-iac7]

Another legacy from the Clinton years = making homes "affordable" for the "Minorities" and low income - was the rhetoric = giving banks, lenders another cash cow was the reason.

By qualifying people for mortgages far above what their income could really handle = pay only the interest - etc etc ...then, of course, everyone climbed on the band wagon, driving the price of homes up almost double...realtors benefited, towns saw tax coffers swell - was beyond their real value...

Anyone who couldn't see this disaster coming from the get-go had blinders on.

My modest house in California that I bought in 1972 for $18,500 and sold in 1975 for $30,000 now goes for half a million. Insanity.

Beyond me how it can ever be brought to sanity - too many people in homes priced way beyond worth...

[dawn53]

We bought our first house in the early 80’s...interest rate 10 percent, and it cost $35,000 (paid it off in 8 years.) Bought our second house in 1989 at a cost of $57,000 and the interest rate was 8%, and we kept refinancing down as the rate dropped until we paid it off.

Now if a young person would come along today and buy our home, the cost (after the bubble has burst) would be around $300,000, and the sad part is they would pay more for taxes and insurance alone, not counting the mortgage cost, than we ever paid for all three combined.

Difference in our income back in ‘89 and the average income now, I don’t think it’s doubled, yet the price of the house has soared. I feel bad for people trying to break into the real estate market, it’s awfully hard...at least in our part of the country. I just read a Forbes report about our area that says we’re probably going to see a V recovery, prices will bottom out and then spike up. IMHO, that’s not good news for our local economy...the average working family can’t and won’t be able to afford housing.

[PAR35]

The bubble around here is in capacity, not price. Adjusted for inflation, there has been little change in prices in this area over the last 10 years or so, and probably over the last 30. (There was a bubble in the late 80s, but if you start either before or after that bubble, the numbers should work out about the same. The main bubbles were in the northeast, California, and portions of Florida.

[familyop]

Heh. The “bubble” started in the early 1970s.

[loreldan]

There is no way you could even build an average size house for $134692 like they’re saying the median should be - even if you used illegal labor.

I know because I just finished building my own home myself (without illegals). I spent approximately $165,000 in construction, 65,000 for the lot and about 10,000 for financing. I did a lot of the labor myself (framing, all cosmetics, etc). Altogether it cost me about $240,000 to build a 2157 sq foot home (not including the basement). There’s no way you would ever find workers or materials to build a home for $134000.

[Eva]

Home prices in Washington state are up 7% for 2007, not as big of an increase as in previous years, but an increase, never the less.

[montag813]

Jim Cramer tonight said the housing market will rebound in 6 months due to the Fed’s actions over the past 10 days.

[fight_truth_decay]

Location, Location, Location

Competition in over-built marketplace of new housing-- areas effected are always regional and those areas suffer over and over again every few years repeating the same bad habits. Poor land management, planning boards which cater to big developers for more tax money, self interests, etc.

Second Home Buyers are still building million dollar homes, or remodeling in the upper income because they do not have debt hanging over their heads. These buyers are often mostly all cash. Takes years to build true wealth. It is so common to see families that want to look like they have wealth, hire someone to clean their home, mow their lawns, care for their kids when that money saved over time would have built real wealth ! Their fantasized destiny is doomed to fail.

Try the coast/lakes of Maine where you cannot replace the land/location. Look at Long Island, NYC..same scenario. Often sellers can afford to wait it out and wait for the paranoia (these stories are nothing new) to pass.

Parts of the North East - parts of Maine, Long Island and NYC are areas that has always held their value, land is scarce. The Midwest - Chicagoland - has burbs that are always stable resulting from better growth plans/controls; however, other areas more west have build in great mass with slower returns because of the competition from new vs. new and existing homes.

Florida has always been over built with condos, etc. Florida has, to many buyers, now dropped out of favoritism for their second homes.

Overseas real estate markets are coming into play--Paris, Bordeaux, Tuscany etc. Might say real estate investment for many Americans has moved offshore. Away from the same shopping centers with the same football sized parking lots and chain stores/eateries, etc. People are traveling abroad as their "generation genre" reaches later years to recapture the beauty, romance and history which still remains.

Don't buy with too little money down just to flip. Too many Einsteins listen to these get rich quick morons on TV scamming their books and tapes on how you too can be rich like them while standing next to their(doubtful) yacht or beside a Ferrari! People have to take responsibility for their actions! If you can't afford it, buy something you can afford. If you are afraid what your friends will think, get new friends.

These articles make my stomach turn as they play on paranoia of Americans. What a stupid country we have become!! Spoiled, always belly aching and downright Dumb!!! Markets always have and will continue to make adjustments.

A Foreclosure too often is just an easy way out from one's responsibility. There are always exceptions--health, loss of jobs; but still proper planning can help one weather any storm.

What bothers me now is that "these people" will expect the government to bail them out with our money, which one could argue, with attitude, that our government will spend it anyway. But shouldn't our tax money be used for the betterment of us all and not on just a few in order to feed this so called overspending addiction which has become so epidemic?

[murphE]

My goodness. Was this written by Ron Paul?