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

To: Steve_C who wrote (205312)	5/30/2009 1:32:10 PM
From: Skeeter Bug	Respond to of 306849

>>Skeeter, Skeeter, what happens to price depends upon the suppliers supply curve.<< i see you don't understand the meaning of "all else being equal." they cover this in econ 101. take it. >>If the receiver of the capital grant is a marginal consumer, meaning he has the lowest demand price for the capital in question, then it's entirely possible for the market price of the capital to decrease.<< only if "all else being equal" isn't true. something else has to change. the idea that increasing costs increase demand when everything else stays the same is insane. take an econ 101 class. can you explain why you used the term "marginal consumer?" it sounds like you have misapplied the word marginal to sound like you've taken econ 101 when you clearly haven't. you aren't fooling me! <g> >>That's the kind of thing governments consider all the time when they decide to create a market. Don't BS me about your economic education.<< again, take econ 101. i received a perfect grade in econ 101. so, you want to put the government up as an authority? have you seen fannie and freddie? have you seen the mortgage market they created? have you seen the results of their monetary policy? you think these are good and should be used as an example? oh my! >>The point here is for Jimmy is to say what will have to price of fuel cells as a result of the tax break<< no, that's now your off topic point. the original point had to do with how subsidize impact price. you butchered it by creating a an irrational analogy. >>as it is he who says it is "a fact" that prices always go up with tax breaks.<< "all else being equal." it is a common concept that is explained in econ 101. don't hate, just take the course. you will learn a LOT. it is possible that demand for housing can increase as their price increases, but this is only true if "all else is equal" is false. something else has to fundamentally change. for example, more people think housing will never go down. this means they will pay higher prices. it isn't the price increase that is driving the demand, rather, it is the view that housing is somehow less risky now that everyone else is paying up for them. of course, that view was stupid and many people are paying the price for their stupidity right now. it is a good thing that those who were smart and paid what they could afford aren't being penalized for the bad decisions made by folks who weren't thinking clearly (thank goodness for prop 13!). however, if that mental view of the market stayed the same and prices were halved over night (cost ovf ownership went down), demand would EXPLODE. could you imagine selling a $500k home for $250k at the height of the bubble? you'd probably get several thousand offers. so, increasing the cost of home ownership, all else being equal, will marginally lower demand prices. i can't wait to here your argument how raising property taxes now will change some other factor that drives demand for homes. this should be highly entertaining ini a sam i am kind of way. <g> econ 101 in action. seriously, it was my favorite course in college and it is one reason why i know that the federal reserve and treasury are complete frauds.