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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: koan who wrote (77946)	4/18/2008 12:09:39 PM
From: Broken_Clock	Read Replies (1) \| Respond to of 116555

koan Have you ever taken basic CCIM courses? RE prices are mostly a variable of jobs. Less jobs = lower home prices.

To: koan who wrote (77946)	4/18/2008 2:12:04 PM
From: mishedlo	Respond to of 116555

But one mistake people make all the time is thinking there is a 1 to 1 direct correlation between "simple" wages and housing prices. Although I think that is basically true in the main, people can often afford more than people think because they have the savings to put larger down payments. In the short term there is no correlation at all. The fact that housing prices rose 3 standards deviations above wage growth and rents is proof enough. In the long run, that is not sustainable and housing prices are crashing back to reality. It is conceivable they sink below the trendline on the way down. A supply of houses mansions from baby boomers might be a catalyst as might rising energy prices. Mish