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

To: SouthFloridaGuy who wrote (102543)	9/27/2009 3:25:17 PM
From: Dan3	1 Recommendation Respond to of 116555

Re: Things have bottomed here and they've bottomed in many good areas within the Bay Area, Seattle, Los Angeles, Boston,... I think it's more likely a bear market rally in the housing market. Gross incomes are still down more than housing prices since 2000 and the share of income available for housing is dropping - communications costs, State and local taxes, and energy, in particular, are up significantly and (I think) permanently. It's now a requirement of modern life to have high featured cell phone service, high speed internet, and high channel count cable or satellite - those were luxuries 10 years ago. Add up the costs of those services and energy costs and consider that sales tax, property tax, State income tax, etc. have been rising steadily and there is less available to spend on housing. Housing prices should be below where they were in 2000, but they're still well above those levels (from OFEO's December report - the most recent on their web site):

To: SouthFloridaGuy who wrote (102543)	9/30/2009 11:05:02 AM
From: John Vosilla	Read Replies (1) \| Respond to of 116555

I think many close in land constrained overpriced hoods in the gateway cities that are in stronger hands without many exotic bubble option ARM's type loans go down slowly for several more years even as inflation takes off again and the cheap beaten down areas that make up most of the country now start appreciating again. Much higher rates are killers on $800k loans in your area but mean much less on a $100k loan in Atlanta where the improvements make up much of the value and the mortgage is a much smaller piece of the monthly cost of home ownership. Think the 1970's repeat. That wasn't necessarily a good time for NYC RE.. But the housing bubble price correction is pretty much over IMHO. Many areas overinflated in this country are down a good 50-80%..