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

To: Tradelite who wrote (67430)	11/28/2006 5:53:14 PM
From: XoFruitCake	Read Replies (3) \| Respond to of 306849

Trade, I think you lost me about what you are trying to argue? Are you saying that RE is a good investment long term? Are you saying the HB will do o.k. long term? If housing price moving down 10-20% from here and take a few years to recover, a lot of home owner is shot as far as their financial future go. Even if they can keep paying their mortgage, they won't see the same price that they could have sold their house last year in the next 5-8 years?? So they are paying a lot of money more than renting into the house and get nothing in return. If you think low fix rate is the reason that we have the housing run up in the last 2-3 years, I don't think you are even causally involve in the RE business at all (buying, selling or someone involve in any part of RE transaction). In Bay area (N. California), the affordability index (which is based on fixed rate interest) is already in single digit... bayhomesite.com The index assumes that a household that can afford to buy a home is spending 28 percent of its monthly income on a 30-year-fixed-rate mortgage with a 6.77 percent interest rate, along with property taxes and insurance. Based on this index, only 8.8 percent of homes sold in the East Bay in the third quarter were affordable to households earning the median income of $83,800. A year ago, the affordability index in Alameda and Contra Costa counties was 9.8 percent. In San Joaquin County, it's even worse. Only 4.8 percent of homes sold were affordable to households earning the median income of $57,100, compared with 5.7 percent a year earlier. In the San Francisco metropolitan area, which includes San Mateo County, only 6.8 percent of