Posted on 09/23/2010 9:46:19 AM PDT by Kaslin
Yep. We grew up in a Chicago bungalow, Mom, Dad and two kids in 1100 square feet with one bathroom. Never felt poor, either.
My opinion is not based on the outside looking in. They freely tell us their business without us asking.
It’s shocking how they live and what they think they should live like.
It’s really sad.
The fact that you even thought about where the market was and where it was heading, that you even looked at a graph of the housing market, that you even considered at all anything but your desire and need for a house, puts you ahead of most home buyers, especially first time buyers. Most people were riding on the age old idea that real estate always gains in value over the long run. That idea has been blown to smithereens now and the housing market will never be the same.
I sure hope so.
The house my father built, and I grew up in, is illegal now. Too low ceilings, too small a lot, septic system instead of a Title 5., too narrow rafters and floor joists....I could go on. ( They were fine houses and are still standing and looking good. )
Just and unjust prices is a Marxist view. Capitalism has no ‘just’ price. Price is what ever a buy and seller agree on and has no set price. This non ability to set/force/command/plann prices is the reason Socialist planners can never plan their ideal society. Prices change.
Of course most of us grew up in, have been maleducated into, and can not understand that there is no set price for anything.
Historically houses, in general, have never gained in value. Fixed for inflation.
A thirty year house, should no more be more valuable then a thirty year old car.
I bought my second house in 2000 (a modest, 1800 sq ft colonial), with about 10% down and have been paying a little extra on it for 10 years. I’m still easily $50000 underwater. Prices are down up to 70% in our area. Smart or stupid had nothing to do with it.
I remember that speech - Man was I ticked off at Bush for that. After working 2 jobs to scrape up 15% down on my first home, a $37,500 2-bedroom flat condo, and after paying mortgage insurance for 3 years, and after paying "through-the-nose" 13.25% interest rates for 3 years, he decided that it was wise to give all these deadbeats a free ride. I EARNED my first home - and he was going to take my hard-EARNED money and give it away.
If the democrats weren't exponentially worse, I would have considered voting "D" in 2004.
The county valued my house at $360k. I told them they could have it for $350k. Of course, they were not interested.
Generally true, with one caveat:
If you DO become unemployed, and are offered a job outside of commuting distance to your home, and cannot sell it because you're too far upside down, it is a detriment to your ability to take that opportunity. Or say the neighborhood ghettofies (very common thanks to liberalism) and you can't escape to a safer place. That's just a couple examples but there are situations where a person thinking only of a place to live could still have problems due to this.
bttt
Hmmm, intesting perspective. My parents bought a new house in 1963 for 28k and my mother sold it in 92 for 212k. Are you saying that if they had bought a new car in 63 for say, 3,000 dollars it would have been worth $22,000 in 92?
Just before our boys left home we drilled into the that what they saw around them (our house and what was in it) took over 20 years of plugging away and saving, and for them not to expect everything at once. One listened and is in Fat City, even today. The other didn't and has declared bankruptcy twice.
not everyone has the amazing ability to walk on water and know the future.
People believed home prices were a stable fact of life. the 2005 bankruptcy reform was written with the notion that NOBODY would ever walk away from their home.
Banks used apprasers to fraudulently inflate home prices to put their money out via the default swaps. (remember the papers were sold based on the DEFAULT VALUE PRICED INTO THE SALE)
now nobody knows who owns the notes and the courts are focused on clearing dockets and not the law.
Well if she bought a 63 vette, no problem...
Restored nicely, yep!
I meant houses, in general. Naturally there would be single extremes.
But, let me expand a bit on my notion.
I first got it on a study done on stable, white, lower working class neighborhoods, in and around Boston. Pretty much everything was held to a social constant. The neighborhoods had commonly three to four generations in them. No gentrification, no ghettofication. Culturally they stayed the same, white, working class, lower professional Catholics. Further, these were triple deckers, with minimal lot lines, so there was no room for McMansions.
Anyways, held for inflation, prices remained the same.
Another view.
The used car view. Houses are things. For instance I’m a carpenter. A house is a house. It’s a box. You think of your house as a home. Something romantic, personal. Everyone in the trades, the real estate bidness, the banks, it’s just a house, a commodity.
Anyways, why should a used, near worn out, style dated, performance dated product increase in time? It shouldn’t, and doesn’t. ( In a free market )
However, what if through continued zoning, land use planning, you suppress the natural rate of house/neighborhood building? That makes existing supply, worn out as it is, increase in price. Like used Chevy parts in Cuba.
But neither the house itself, nor the used Chevy part increases in value. It is an artificial increase caused by political intervention.
Buffalo NY has ten thousand abandoned free houses. Why? Politics. Politics chased out the industries, the labor left. Lose half your labor, lose more than half your house prices. Ditto Detroit, Cleveland and hundreds of other cities.
We have to throw out house prices in cities that are being politically killed and its citizens fleeing.
We have to throw out rural Texas towns were new fled arrivals from the political death zones have bought O’l Earl’s place that he raise chickens and worked on cars.
Anyways, back to my general statement. House prices are tied to income. Everything held constant, houses rise with income and the inflation rate, such that they require the same amount of labor time to buy. Which makes sense in that a house is really a big pile of skilled, semi and non skilled labor. These two prices or costs, labor and house prices are tied.
(there are other things that cloud the price level of house. Finance as we have all seen these last few years. Taxes, construction innovations( nail guns ).)
A chart by Robert Shiller of Yale on historical home values.
http://www.nytimes.com/imagepages/2006/08/26/weekinreview/27leon_graph2.html
ghettofies= Section 8. Move’m out of the city to the country.
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