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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 (205408)	5/31/2009 2:31:38 AM
From: Skeeter Bug	Read Replies (1) \| Respond to of 306849

>>I guess you don't recognize that your marginal analysis is simply a circular argument.<< no, it isn't. please stop wasting everyone's time. it is not our job to educate you - people get 90% pensions to do that. >>You're assuming those locked into their homes represent homes that would not find buyers except at a much lower price.<< increasing supply, all else being equal, will lower price. lowering the price will mean houses reach 2/3 of a loss more quickly - which proves validates the original point you contested. >>Thus, home prices will fall when those come onto market, which will in turn cause more homes to come onto the market.<< he didn't say that, but it is likely true. many people are underwater right now. at some point, the level of underwater will increase to a point where they just walk away. that means the lower prices go, the more people leave their homes and homes that eventually hit the market. this drives prices down. >>My question for you is, have you approximated a demand curve for housing in California? Or are you simply making a speculative blow-off type argument and calling it marginal analysis?<< this is basic econ 101 stuff. that's like asking someone to produce a proof that math works when trying to explain that 2+2=4. >>re example: 2 million in equity and she can't afford the tax? Not likely and certainly not representative of most lock-ins. Try again.<< she'd have to take a loan to pay the tax. perhaps she would prefer to live within her means (i know, something totally foreign to government!) and would like to sell the home. the point isn't that all of these people will sell their homes, the point is that more of them will, which will bring some number of marginal homes on the market and drive the price down some marginal amount. again, very basic economic stuff. since you don't think $100 billion is sufficient to run CA, how much is sufficient? $150 billion? $200 billion? $300 billion? also, what services do you think CA residents want that they are willing to give up prop 13 to get? the residents simply do not agree with your view. they'd kick any anti prop 13 proposition square in the *ss worse than they crushed prop 1A. not only is your econ theory bassackwards, but you are completely out of tune with the average CA resident's view on taxes and services.

To: Steve_C who wrote (205408)	5/31/2009 2:45:16 AM
From: pheilman_	Read Replies (1) \| Respond to of 306849

Speculative blow-off in California real estate? Nah, couldn't ever happen. You don't have much local knowledge of the area if you think that Giovanna has any equity. Everyone pulled cash out, that's what paid for everything. Californians didn't earn much more than everyone else but we sure spent it. I am thinking about the demand curves as a series of curves based on when the house was purchased, if 80% of the value is untaxed, then the owner would be quite happy with much higher values. Removing prop 13 collapses all those curves onto one, much lower, curve.