OK, I'll bite..No salute..Don't agree.
Swenlin says:
<<I think real estate
is over priced -- way over priced -- and it has gotten this way because people
have been able to indulge their urge to upgrade their digs, not because
"people need a place to live". Everyone has a place to live, except for the
homeless, who are not creating any demand for upscale housing>>
Oh my oh my....here's yet another fellow who takes it upon himself to proclaim real estate "overpriced." Overpriced compared to what???? Who, exactly, is the arbiter of prices in this country? I want to meet him. <<gg>>
Furthermore, he seems to ignore the market impact of our growing population on prices. Obviously he hasn't noticed the temporary classroom trailers springing up outside school buildings in many areas of the country over the past decade, which were necessitated by population growth--or the colleges reporting that they have been flooded with too many applicants in the past few years.
If we don't run out of actual homes for all these people, we will run out of water supplies and other infrastructure needs to accommodate them in some highly developed areas of the country. If anything, housing is likely to get scarcer, and even more expensive.
********
Then he says:
<<Demand for
housing has remained strong because people still have the means to with which
to pay the exorbitant prices. If the economy doesn't behave as well as some
have been expecting, it seems logical to me that demand for housing could dry
up very quickly. Perhaps it won't happen that way, but it is amazing to me
that the possibility is not even being considered.>>
He seems to ignore the increasing levels of wealth throughout our society, with parents and grandparents leaving kids far more money than the kids deserve. Not to mention rising education levels which lead to good-paying jobs for BOTH men and women. (Remember when mostly just the men worked and the women stayed home?).
What is the likelihood that masses of well-educated, homeowning Americans lose their good-paying jobs and can't find new ways to make a living--to the extent that it would put masses of families out of their homes and create excess supply?
He also forgot that real estate prices have risen historically for many many decades, no matter how much easy credit or wealth or government programs have been available at any specific time. Some experts claim that real estate has risen an average of 4-5 percent per year, factoring in the times when prices tend to plateau and not go up or down.
Housing prices have indeed gone up in a spurt the past few years, but this isn't unusual. Housing prices have only turned down severely one time in the past 15-20 years and only then because of massive overbuilding and speculation on the part of developers and lenders and a short-lived frenzy of buying/selling by trade-up buyers who were making a killing on each house they sold, until the prices truly were too high for most incomes and the party ended with a bang.
Swenlin hasn't shown me any proof that the our real estate market is in a bubble stage, that speculation is fueling home sales, or that the end is near. Just because a stock market bubble burst does not mean anything comparable is occurring in the housing market.
Stocks supposedly have a finite value based on earnings and fundamentals of companies. Paying more than companies are worth is sheer speculation and is measurable.
If Swenlin has the supreme wisdom to decide the dollar level at which real estate is "overpriced", could he also exercise a little of his psychic power and tell us when real estate is "underpriced"?????
I'm dying to know.
<<gg>> |
