“The fact that so many are unemployed, underemployed or have no job security has nothing to do with the crashing housing market.”
Bingo. The fact that housing prices have been artifically manipulated into their sky high dollar amounts, that are realistically unaffordable, is an even bigger issue. This bubble has been nearly two decades in the making. With the $1 Billion dollar “Homeowner Bailout” (EHLP), the Obama administration is going to ensure that only those it wants to own a home can afford one.
Housing prices will drop another 50% unless snapped up by foreigners. The (average) housing prices today are unsustainable to the (average) U.S. family. Adjusted for inflation, for well over an hundred years, the average price of a single family dwelling was $100K (Except for about 2 years, following the depression, where manufacturing of housing was optimized, then the inflation adjusted price was about 65-70K).
When people get it through their heads that houses depreciate over time unless their money is losing it’s value faster, and realize that an oversupply of aging structures should, has, and will continue to fall, it will stop coming as a surprise.
The U.S. has NEVER had a populace that could afford the housing prices of the last few years, or even today. The unprecedented and extreme rise in housing over the last 2 decades was all based on cheap credit, governmental forced loans, and in many cases municipal manipulation (higher appraisal for tax assessment).
No one should be surprised that as 85% )IIRC) of new graduates are returning home, extended families are moving in together, and the overall job and economic outlook is plummeting, that the price of houses will fall for a decade or more (if there’s no sudden crash in the meantime).
Obama isn’t the cause of the housing correction, but he sure is going to do all in his power to make it worse, and use it to his advantage to decide who ultimately can and cannot own a home. He’s a politician, that’s what they do.
Here in NJ, the housing prices aren’t the problem; the property taxes are. Potential buyers don’t like the idea of paying $15K in property taxes alone if they bought the house for cash tomorrow. Those of us who bought here have to suck it up; those who didn’t, won’t. As jobs flee to lower-tax environments, those who own homes are stuck with them, while those who are able follow the jobs.
FWIW, the same dynamic will explain why so few people in their early twenties now will ever have children later; they know the rug can be pulled out from under their feet at any time (as is happening everywhere now), and they don’t intend to be in the same position as us older folks.
“When people get it through their heads that houses depreciate over time unless their money is losing it’s value faster,”
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Got into a big argument with a realtor lady once, she was ranting about how stupid it was to buy a mobile home because they don’t appreciate like a site built house. I told her there was no such thing as appreciation in a site built house, it depreciates too although maybe a little more slowly than a mobile home. She thought I was nuts until I laid out my case and then she agreed with me.
Kinda like student loans. The government guarantees the loan...for life. Non-dischargable in bankruptcy. Thus you are a slave to the U.S. Dept of Education for the rest of your life. That is, until they raid your house for non-payment and shoot you and your dog.
I wonder how many of us could have actually worked our way through college without any loans if the government would have kept its nose out to begin with.
Since the bubble burst, the banks are requiring real downpayments and that the borrower actually have a job. That cuts down the pool of potential buyers. Plus the potential buyer market is much less because so many of them are not working. And there is a glut of houses on the market that skews the whole supply portion of the market. This situation won’t clear up until the feds back out of running this industry.
Bad weather and high gas prices? Surface thinking or just repeating what they are told by the baraq regime.