am not too sure that the "immigrant" population is all low income... there are two sides to this... there is the first generation immigrant and then there are the subsequent generations with a lot higher education levels than the first wave... in the SW USA there are a number of "waves" of these immigrations and they have a few generations within, which are getting more and more educated....
i suggesting "all" immigration constituted low income workers, but i was referring specifically to s. ca where i think we can agree the majority of the influx of immigration that is pressuring housing supply would be obtaining jobs on the low end of the economic scale...
and yes i did note that the $90000+ figure was of combined income, but please also note that there is $81,000 downpayment assumption, totally unrealistic for a first time buyer imo...to be sure lax lending standards have allowed for little or no downpayments....but the point of that article is they way i interpret it ...that assume for a moment the first time buyer doesn't have the necessary $81,000 downpayment, and btw, also assume that both income earners didn't get a combined 12% pay increase raises (notice the jump in income requirement from $82150 to $93490?)....
those assumptions would mean that the median price of housing in s. ca are already priced out of the reach median wage earner...frankly i don't buy for a minute that the average first time buyer has the requisite 80 grand plus associated costs and fees ...they are getting a LOT of help by means of programs such as
getdownpayment.com
sort of reminds me of the incentives being thrown at the automotive consumer...
Now... everybody bitches about the "low" savings rates in the US.... would it be possible to consider that... buying a home and paying all that interest actually constitutes the "American way" of "savings" I mean, after all... it is said that the largest investment most families will make is that of a home ?...
i disagree with you here z...
taking on mortgage debt does not constitute savings.
furthermore fewer and fewer americans are amassing savings for downpayments
essentially the reason i disagree is that while over time a person can accumulate equity through paying down mortgages and/ or property appreciation.
the fact is you still have to live somewhere.
in other words it's not cash (savings) until you sell.
and then you *still* have to live somewhere, so unless you downsize significantly any appreciation you have on paper is just that.
it's only when you convert the appreciated value to cash that it can actually constitute "savings"....
Even without this worry, there is reason to expect homebuilding stocks to cool down going forward. Our homebuilding model has peaked, underscoring that the phase of blowout profit estimates that this group has been posting is cresting. Fortunately, value is still good and a better job market means that housing activity will stay firm, so this group is unlikely to suffer much in relative terms. Still, only a neutral weight is recommended.
yes...i am agreeing, but the caveat here is "a better job market"....
not sure what that means in the current environment...meaning the bleeding of jobs has been staunched ? or new jobs are being created sufficiently to keep housing on a solid footing. (starting to see some glimmers of hiring here and there but it still appears the losses are outnumbering the gains)
my other point was that i'm not sure that even in a "neutral" housing environment, we should take a sanguine attitude toward the economic recovery. in other words ....would a neutral housing market be enough to help sustain spending just as the hot housing market was credited with saving the economy from a deeper recession?
if so it seems like we're trying to have it a little bit both ways here.
i suppose there really is no way to quantify just what kind of "wealth effect" from housing appreciation has been working its way through the economy as an offset to the equity market losses, job losses, and increasing consumer debt.
Is it possible that the "service" jobs created to take care of the needs of these populations is sufficient to create a viable economy on its own right ?
one thing i find worth watching right now right now is the grocery store worker strikes
especially in s. ca..
basically they striking because they are saying the cannot afford the extra $5 per week for health care...and these are the same people who are beating down the doors to buy the $400k+ homes starter homes???
maybe they're not feel so wealthy after they cut that big check month after month to wells fargo.. that extra five bucks seems like a real budget breaker<g>
:) |
