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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (28812)	3/26/2005 4:04:14 PM
From: shades	Read Replies (1) \| Respond to of 306849

"Also, if housing inflation foreshadows an accelerating trend in inflation in the general price levels one can expect wages to inflate as well." Ok but if we are bleeding jobs, how does the few that remain in the USA getting a wage increase help the masses who are unemployed - will rising wages help a man who gets no wages at all?

To: GraceZ who wrote (28812)	3/27/2005 8:12:24 PM
From: SouthFloridaGuy	Read Replies (2) \| Respond to of 306849

Contention 1: The great news for us was that our incomes rose so much during the period our house was priced below what we paid for it (ten years), that the mortgage payment shrank in significance Contention 2: as well as in real terms (we refinanced at a shorter term and lower rate). I never saved so much money in my life as I did when I was stuck in that house.>> Conention #1 is not happening for most people in the U.S excluding insurance benefits. Contention #2 already happened, unless you're proposing that mortgage rates will hit 3%? So where does this leave people without homes or vice-versa the people who have to sell to people like me? S.O.L.? Not disagreeing that a home is a great investment, but the usual caveats apply which act as a "risk-premium". For many new homebuyers in the so-called Blue States, that risk-premium no longer exists in the cost-calculation.

To: GraceZ who wrote (28812)	3/28/2005 1:56:37 AM
From: John Vosilla	Read Replies (1) \| Respond to of 306849

How does a 5-10% drop in value of an asset in which you have little financial interest ruin you? Usually that person is younger and more predisposed to spend all his income. A collapse in values will hurt consumer confidence dramatically, destroy credit, destroy families and take an even bigger part of the homebuyer market out of the demand portion of the equation perhaps deflating values for a generation in a new environment that might not be as friendly for bankruptcy filers. Today just seems very different from prior periods and doubtful that rising incomes or declining interest rates will occur to bail out folks today. Add in the relative cheap rents versus high ownership costs today and it tilts the scale even more towards bailing from an upside down property.