[Scukonah]

When push comes to shove, no matter the amount required, the capital will be invested. It has always been so and I don't expect it to change.

[Petwrenny]

Basically if you bought in the last 4 years, like I did, these are trying times unless you had a huge down.

[fil_nurser]

No that was me, and it was "My Country Tis Of Thee" in a duet on the sidewalk.

As the others ran for the cabs.

[prmnwoks]

Basically if you bought in the last 4 years, like I did, these are trying times unless you had a huge down. Why are you in trouble? If you do not indend to leave for a while you should be able to wait out the slump until your property recovers some of it value, maybe all.

You didn't take a loan out on your equity did you?

[milfovoxapl]

Good news!

I'm not as far along as Patroklos, but if housing prices come down I might reasonable dream of owning one myself eventually.

[Soypopetype]

@Dans
Do you know what is the value of the USA Housing Price Index?

[AlexClips]

Housing market in Canada don't seem to be affected(yet?) by your crisis.

Which is a good news for my dad and mom... It will be though, especially out here in BC. We have had bubble prices for a long time, like a million bucks for a one story bungalow in Point Grey.

[Bobdilan]

This is not good news. It's bad news if you bought at the height of the bubble. What it means for the rest of us is that the money we have is now worth more, it can buy more house for the same amount of money.

As Che stated, lower house prices means the economy is doing poorly It depends on where you are. If you are in California, or either coast, anywhere the bubble has really taken off, then you are in trouble.

The thing you have to realise, is that they are fewer of us, then there are of you. There will be less demand for houses just because they are less people in my generation then yours.

It's natural that the prices are finally coming down because they were not sustainable, and neither was this oversupply of houses. What is going to happen is that the prices are going to fall until they are brought in line with what they are actually worth.

Like I pointed out earlier, more home building means more home owning. Since more homes aren't being built, this is bad. True, more homebuilding results in more houses owned, if and only if the current supply of houses is less then the demand of houses.

If the current demand for houses is less then the supply, then construction will stop until the two come in line again.

[OixKKcj1]

Originally posted by Ben Kenobi
It's bad news if you bought at the height of the bubble. What it means for the rest of us is that the money we have is now worth more, it can buy more house for the same amount of money. Low home prices isn't just an effect of a poor economy, it's also a cause. Consumers spend much less money when the price of their home decreases. Sure some people don't own houses, but the spending effect of those people is minimal compared to the effect of the spending of homeowners, and generally their income is lower.

It depends on where you are. If you are in California, or either coast, anywhere the bubble has really taken off, then you are in trouble. California especially, but California is a huge part of the US economy, and generally the US economy will follow the California economy, although it's not a certainty. In this case the recession will reach into the whole US economy.
The thing you have to realise, is that they are fewer of us, then there are of you. There will be less demand for houses just because they are less people in my generation then yours. Hey! I'm a generation X'er, not a boomer!
It's natural that the prices are finally coming down because they were not sustainable, and neither was this oversupply of houses. What is going to happen is that the prices are going to fall until they are brought in line with what they are actually worth. What makes you guys think that people aren't going to speculate on home prices like they did before.

True, more homebuilding results in more houses owned, if and only if the current supply of houses is less then the demand of houses.

If the current demand for houses is less then the supply, then construction will stop until the two come in line again. You missed my point though. More houses will be built when prices are stable. Then both consumers and builders can make better decisions.

[XzBZB2UV]

Originally posted by Patroklos


Home ownership is not an indicator of economic success, as this bubble is clearly showing. The simple fact is homeownership is declined becasue millions who had no buisness owning homes (or at least the homes they did at the price they bought them at) were alowed to do so.

They were prestige buys. I bet the wish they had decided to buy a Rolex instead and invested the rest of their their money wasted on a too big house they couldn't afford instead. I don't know how you can say that people in California had no business buying houses. With the prices increasing like that you had to buy a house as soon as you could before you couldn't afford one.

[vNGiDaFX]

I don't know how you can say that people in California had no business buying houses. With the prices increasing like that you had to buy a house as soon as you could before you couldn't afford one. No, you do what I did, which is realize the housing market is inflated and make due with a crappy or even decent rental and save save save. Again, the home ownership is just a prestige thing if the money isn't right, and it hasn't been right for a very very long time. We have been talking about the housing bubble for years now, if you bought during that time, especially if you bought on a vaeriable interest rate, you did not have your financial interests at heart when you purchased. You had something else in mind, status.

Again, I have been ready to but a house or condo for 3 years now, was appaled at the prices and thus didn't buy. I lived in an apartment that served my needs even though I could have aforded far better because I had the long term in mind. Then this September came and went and things weren't to my liking so I still didn't buy. Now that I had my down payment saved I fugured I could at least rent a nice house in the meantime (The one I posted about, I moved in last week) and save more, albiet at a slower rate. But the point is the money wasn't right, so I didn't buy.

[xFZ3k8Mw]

Originally posted by Ben Kenobi


Is that what you thought?

No wonder you got shafted. No, I couldn't afford a home. I could barely afford to rent when I lived in CA.

[Gooracouppy]

Likes like saying a manic depressive is better because they are depressed. No, the market doesn't work that way.

It's like saying it's bad for a business to go bankrupt. Yes, it's bad for the owners and anyone who had that as their investment. But for people who didn't have anything staked in it, how are they hurt?

They could even be helped, if the business went down was poorly run. That's the case of many of these mortgages, yes it's painful, but the people who aren't being hurt are the folks who don't own a house.

No, there is something called a wealth effect. This has been observed after the 70s. People spend money according to their wealth. If their wealth increases they spend more, and if their wealth decreases they spend less. I think that is completely dependent on whether someone is a spender or a saver, which only changes because those who have more wealth can spend more then when they didn't.

They are not economically viable. Hey, it's your system of choice, not mine. Not my argument at all. I'm saying that they are a very significant proportion of the economy, and that they aren't harmed much at all by the folks who have bad mortgages.

If you are going to put words in my mouth, make sure you get them right.

It's not. It's well known that housing prices affect consumer spending. Look, it's happening right now. What affects them more, is not the negative equity, but if they cannot keep up their mortgage payments when interest rates increase.

The loss of value is much less important then the interest rates in reining in consumer spending.

Yes, I do, but as you know home sales are down. Which was happening even before the crisis. They won't turn up until the prices have come down.

Stable and overvalued doesn't make any sense. If they were overvalued they couldn't have been stable. Every business person should know that. Many things can stay overvalued for quite some time. I don't know where you are getting your economics from, but so long as demand holds out many things can stay overpriced. It doesn't have to keep rising to be inflated.

[Smabeabumjess]

Originally posted by Oerdin
Energy isn't a problem in Vegas due to the numerous dams on the Colorado. The big problem for them long term is water. Water is a huge issue in the west and most of the treaties divying up the water rights were signed in the late 19th century or the first third of the 20th. That means California gets the bulk of the rights (as it dominated the west in the 19th century) and the fast growing interior states are left fuming about the unfairness of how resources are allocated.

Personally, I don't mind the current allocation of resources. Ya, what's eventually going to have to happen is the end of heavily irrigation-based agriculture in a lot of the west, water will simply get too expensive to make it sustainable...

[happyman]

The Benefits of Price Stability Yes, so long as the price reflects the value.

The only thing that makes the significant is the fact that they do certian jobs. Umm, no. There are only 65 million homes out there. That means that with an average household size of 2.2, that 150 million Americans are accounted for.

Since there are 300 million, that means that 110 million adults and 40 million children are in homes that are in a mortgage. That's half of America.

Are you seriously saying that the other half of the US has NO impact on consumer spending?

It's the middle class that drives the economy. There are plenty in that group that rent a home and do not own one.

Oh bull owny! We are talking about the whole economy here. Not everyone is affected by negative equity, but every home owner (at least most as it seems) is affected by lower equity. How are you affected by lower equity unless you plan to sell?

And just because prices are falling doesn't mean home sales are going to increase. True, if demand drops then all that will mean is that eventually the sales will match the demand.

That's going to take some time. First, the banking system has to recover, and they consumer confidence has to be restored. First you have to work through the excess inventory before the supply can come anywhere close to matching the demand.

And they prices are going to shoot up becuase less people are going to be selling at that point, and there wont be any new homes built yet. Hmm? Not necessarily.

Price will only increase if demand increases beyond the supply.

Even as prices drop, things won't be restored until this glut of houses is off. Then and only then will the prices stop falling and reach an equilibrium.

Then, after some time later, demand will increase again.

So actually homes sales aren't going to increase until prices recover, not when they get low enough. NOt efficient at all is it. Good, the fewer people who sell, the sooner prices will recover.

Geez Ben, demand doesn't ever hold up when things are overvalued, that's why people say they are overvalued. Why else would you say things are overvalued? Everything has a certain value associated with it. The land plus the building cost for the home will be worth something.

In many places, (not all!), the prices are really out of whack. As you said, the prices have been going up for 20 years. That says to me they are massively overvalued, and yet have consistantly commanded a price above what they are worth.

[gueremaisse]

Ugh! I give up trying to get through to you on this one Ben.

"First you have to work through the excess inventory before the supply can come anywhere close to matching the demand."

You just continually state that supply matches demand. If that were so prices wouldn't fluctuate like they do. There's always a shortage or a surplus, and the reason for that is speculation. That is people buy and sell houses under the expectations of future prices.

I give up.

[ForumMasta]

First I'm hearing about this, NOT!