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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: stockfiend who wrote (91136)12/3/2008 6:24:35 PM
From: Broken_Clock1 Recommendation  Read Replies (2) of 116555
 
IMO it's time to buy houses, at least in areas where prices have fallen back to their historical 3-4x income and 1x rental ratios. A 4.5% rate will push marginal buyers out of their rentals and back into the housing market. Assuming there are any marginal buyers left.
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All sounds great but I think you make two assumptions that are very risky:

1. Rents won't plummet as unemployment escalates
2. There are still well over 4,000,000 vacant units and that number has got to be growing.

In the end, this is a supply/demand problem that cannot be fixed by artificial stimuli. The cure is lower(MUCH LOWER) prices and a growing job market. Everything else is noise.
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