Posted on 12/10/2004 9:05:07 PM PST by nanak
this had a big effect on house prices
http://www.facstaff.bucknell.edu/pagana/mg312/bank.html
This is interesting. I've been predicting the demise of the nuclear family and return of the extended family for a decade. Guess the housing market served to hasten it along.
It isn't possible for the entire housing market in the USA to crash.And,yet again,I'll reiterate the salient fact you are ignoring...real estate prices go up and they go down. I have lived through this many times over and I am not ancient.Real estate is a commodity,just like pork bellies and gold and soy beans and all kinds of other things. And like them,goes through natural cycles of ups and downs and booms and busts.Actual real estate BUBBLES are really quite rare and more often than not,are area specific.
"...As it became increasingly clear that the nation’s lackluster economy needed a jumpstart, NAHB was the key housing organization in Washington to sign on to President Bush’s plan to create new jobs and boost economic activity by cutting taxes. NAHB lent the White House its support throughout a tough legislative process and led efforts to ensure that providing tax relief on dividends would not inadvertently undermine the effectiveness of the Low Income Housing Tax Credit. The final tax measure provided lower tax rates on capital gains that also applied to dividend income, and it actually created a new incentive for corporations to invest in the housing tax credit.
The Administration’s tax stimulus made effective this year across-the-board rate reductions that were scheduled to occur in 2004 and 2006. In addition to lower capital gain tax rates, which reach 0% in 2008, the package contained more good news for the businesses of NAHB members: an increase in bonus depreciation from 30% to 50% throughout 2004, an increase in small business expensing from $25,000 to $100,000 and an increase in the phase-out threshold from $100,000 to $400,000 through 2005..."
http://www.nbnnews.com/NBN/issues/2004-01-12/President%27s+Message/index.html
If you think S&L was a big scandal, wait and buckle up for coming FANNIE MAE storm.
I agree with you 100% on Ponzi and the cycle thing. However, if interest rates start rising across the country, it will impact prices across the country. Naturally those properties most impacted will be those most over-valued (or with a sales demographic of the fewest potential buyers). Also, I have no idea what happened with banks in the last decade. Banks used to place conservative bets and bankers were cautious. It seems as if they all went a little nuts with their lending practices and home buyers bought into the insanity.
WOW...lots of neat info there!
remember the boomers are hiting 59 and they may go on for quite a while. Some will stay with the kids. If it means another bedroom, no problem if moms brings a retirement and soc sec check.
"That housing boom was lower and middle income class
families buying homes as a result of his tax breaks."
I think you are giving WAY too little credit to low interest rates and loose money.
What that means is that "old timers" and kids who inherit California property can afford that real estate but first time home buyer "outsiders" cannot.
I bought a 3 bedroom San Diego house in a nice neighborhood during residency in the early 1980's for $117,000. (That was considered pricey back then.) That is now our rental property. My in-laws bought their 4 bedroom house on 10 acres in Central California 15 years before for much less.
If the "death tax" goes away and stays away, that means that my kids and everyone else in the same "old real estate" boat will be trading multi-million dollar California properties just like the kid in the old joke that traded his million dollar puppy for two half million dollar cats.
Everyone else will be SOL.
What it will probably mean is that more and more families will be paying the $1400/month rent for houses such as our rental property because they can't afford to buy.
Such price levels are financed by new home-buyers being in debt up to their eyeballs.
What negative social consequences that will bring, only time will tell.
BTW, what's property tax in California? Does prop 13 protect homeowners from ever rising property tax?
Prop 13 protects me. Back in the 1980's, I thought it was terribly unfair since my next door neighbor paid half the property taxes that I did. Now that I pay 1/4 of the taxes that the average new San Diego property owner pays, I think Prop 13 is the greatest thing since sex. :-)
WE'RE DOOOOOOOOOOOOOOOOOOOOOOOOMED!!!!
Here's my new prediction in light of the return to multi-generational family: it will impact divorce rates and the number of divorces will decrease from the current 50%. You'll also see a drop in the nanny business as the grandparents return to traditional role of pinch-hitter care provider.
I didnt mean to exclude that. It all worked together. But I was referencing the article which seemed to point to upper class incomes/housing.
Im pretty sure house prices are in decline in Japan, the population hasnt shrunk, the interest rate is rock bottom, and land space is limited???
anyone know about this?
and many retirees are going for part-time work, something I see boomers doing. I'm out!
take it easy!
The slight stock market recession hurt wealthier people.When Wall Street (used generically to mean ALL equity markets...not just the NYSE!)bonuses were cut severely,everything from real estate to restaurants,to high end department stores/boutiques to art to jewelry stores felt the pinch.The markets are doing well now,there are LOTS of jobs,and so,the doom&gloom crowd needs to stop with the sky is falling stuff.
Banks,like credit card companies( now,unfortunately often one in the same),lost their collective heads decades ago.I don't really know why,except for a quick guess...the lure of easy money,without really factoring in the consequences of giving people easy credit,who never should nor would be given it before.
Here's my new prediction in light of the return to multi-generational family: it will impact divorce rates and the number of divorces will decrease from the current 50%. You'll also see a drop in the nanny business as the grandparents return to traditional role of pinch-hitter care provider.
Happen to know a screaming liberal who was screaming about this same thing seven years ago. What do liberals have against Fannie Mae?
This is just my opinion, but guys are probably less likely to come rolling home drunk at 2 a.m. with lipstick on their box shorts if mom or the mother-in-law is living there.
Also, the extra help with child care will take some of the pressure off the parents, whether both work or not.
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