My perceptions of the real estate market are formed by living in a part of the country where it has been a buyers market for almost a decade and only recently started to recover. Your's are formed by being in a part of the country where it's been a sellers market for the same decade and reading the stats.
My view isn't built on the California bubble. It's built on the figures I've cited in this thread which apply to the country as a whole.
....whose experiences are valid? I know, I know you can't take micro to macro.
The figures I cited come from the country as a whole and they aren't my figures.
Now if you want we can apply it to the stock market. You say we entered a bear market some where in 1998.
The bear market started at the Oct '97 stock market break.
Most people would say that it started in March 2000. Why?
Because they confuse price with value, with appearances of money with money, and they can be fooled for extended periods of time, forcing everyone to act like a fool.
Because people think that the market was these indexes and stocks that everyone owned and disregarded the bulk of the stocks whose prices didn't move for years. Real estate is the same,
The figures cited were for the country as a whole.
while certain locations are subject to the expectation of rising price, buy now at any cost phenomenon you describe. Other areas you have people that have given up hope of selling their house because they can't get enough money out of them to get into something else without going back to square one equity-wise. I know a number of these people.
So house inflation isn't good? Even though they give up on selling, they don't lower their price.
The averages and median selling price are, of course, made up of those homes that sell and resell.....just like the stock market indexes. It masks the fact that large numbers of homes haven't and won't recover any time soon in large areas of the country. Even while five miles away people are building McMansions.
This is the kind of thing that moves FED officials to vote for more stimulus, but stimulus doesn't increase the quantity of new houses as much as it increases the prices of existing ones.
In Baltimore City we had a mayor that went on national TV stating that Baltimore had 40,000 houses in excess. They started a program to destroy these houses in order to shore up the market. This situation comes about from people voting with their feet and it doesn't have much to do with the price of money.
Baltimore is making a fool of you. 40k in excess of what? The 40k of houses are so dilapidated that no one wants to buy them at any cost. Their maintenance is so high that a prospective buyer might as well try to buy something better.
I hate to say it but we are like blind men talking about an elephant here and so are the statistics.
I see perfectly well what is happening and you will see in time the same thing. The fact is that the FED has to break inflationary expectations as soon as possible including such expectations in housing, but instead they talk about more stimulus. |
