patrick.net

Huh, did you mean to say that home prices would go up if Americans were - unwilling - to accept an increase in people living under the same roof? If more people live in each house then demand will be lower, thereby decreasing prices. Furthermore, you didn't address the rather striking decrease in home ownership among those Americans who are younger than 55.

Did anyone notice that according to the corrected numbers, California has the lowest rate of houses owned free and clear??? What does this esteemed board think THAT means...

It just means that Californians are super smart and don't let equity build up in their home like idiots. Houses always appreciate, unlocking the equity that buyers deserve. The only reason prices aren't appreciating is that poor people & illegals that refuse to work hard are taking hand-outs from the system that are supposed to go to property owners.

/that lady from that video

Prices aren't going up. Not only can't younger Americans afford homes, neither can the older ones unless they're living in modest areas across the US where jobs may not be plentiful or the weather sucks. Paying your mortgage used to mean something in America. We're losing our self respect as a nation. I agree with Patrick wholeheartedly that renting makes more financial sense in a lot of areas but I can also argue the other side because I've seen both. There's something special about owning a home in a nice community where your kids can go to the pool and say "Hi" to neighbors who take pride in their community. As a renter I feel better about not having debt but I "miss" being a home owner - so do my kids. At least they won't have student loans choking them to death. How can a kid coming out of college with enormous debt even think about home ownership? It's only going to get worse because mommy and daddy can't tap into their home equity loans any more.

Housing Affordability dropped long long ago...hence many used ARM loans

California's Housing Affordability Index Falls to 28 Percent in March,

CAR …goliath.ecnext.com/premium/0199/0199-2845760.html

May 8, 2003 - The March Housing Affordability Index (HAI) decreased two percentage points from 30 percent in February 2003. The minimum household income needed to purchase a median-priced home at $352780 in California in March was $82470, based on a typical 30-year, fixed-rate mortgage at 5.80 ...

California; SOUTHLAND FOCUS; State Affordability Index Down in

Jul 14, 2000 - Southern California's affordability index also fell to 36%, down 3 points from May 1999. Only 25% of Orange County's residents could afford a median-priced home--$322080--in May, down 11 percentage points from a year ago. "This strong price appreciation is really tied to lack of supply ...

San Jose Mercury News : HOME AFFORDABILITY A BIT BETTER BUT ...
Nov 3, 2000 - The least affordable county in the state in September was San Francisco, with an affordability index of 12 percent, followed by San Mateo and Santa Cruz counties at 13 percent. Contra Costa was next with 14 percent of households able to afford a median-priced home. ...

Upton Sinclair wrote, It is difficult to get someone to understand something when their paycheck depends on their NOT understanding it. Ask a Real Estate agent how difficult it is to convince sellers their home did not retain that 2006 value. Why did real property become so overvalued ? When you know that, you will know where values will return to. We have not yet achieved a balance and we may experience a pendulum swing. But how would you like to be a hundred thousand dollars upside down in the first few months of home ownership ? Is gubmint still offering tax credits to anyone willing to take that chance ? Are those people angry ?

uffthefluff says

How can prices be expected to go

What group of people believe Real Estate prices are going up ? Maybe when the stock market crashes and all those investors move in to Real Estate causing a short term rush. But that's it ! For now, Just like spoiled children, everyone is having a tantrum because they are NOT getting what they where gettin over the last 30 years.

Sybrib says

the highway 99 stretch will do well as their economy is tied to agriculture and exports

Fresno County produces a nice ag haul -- at $6B it's the top ag county in the nation -- but it also has a million people.

That $6B is a nice input, but it's only going to ~3% of the population. There's some trickle-down as the money spreads into the wider economy, but Fresno as a whole can't live on ag any more.

It can do well as a closer low-wage job center, but there are no jobs in Fresno even so.

Instead of high-speed rail to the BA & LA, Fresno could use a world-class subway system. Wouldn't cost much since they've got 1000' of dirt until bedrock. Probably cost less too.

Why hasn't anybody thought about banks? I mean banks just can't freely hand out mortgages to younger generations without 1) continuous govt. backing and 2) supporting income of those people who get mortgage.

bubblesitter says

Why hasn't anybody thought about banks? I mean banks just can't freely hand out mortgages to younger generations without 1) continuous govt. backing and 2) supporting income of those people who get mortgage.

True but that also invokes the shadow inventory issue.

Inflation in the past usually mean that prices would go up but in decades past one could simply work OT to make up for it (not happy about it but they could) Now that isn't the case.

One could argue that banks are not unloading houses because the price drop could be severe enough so that a couple (not an individual) could under theory might be able to pay in cash in some markets. If the housing market is removed from banking then how much business would banks really do?

I like to use New York City as an example of how prices can go up when the average person cant afford a home.

The median income in Manhattan is 47k. The median house price is 1.4 million and thats not even a house its a condo.

bubblesitter says

All the idle money should have rescued the banks from their misery by scooping all those rotting mortgages.

Money doesn't buy mortgages, it waits for the courthouse steps.

This whole thing (the capture of housing by wealth) is entirely obscene. Yet we watch it go since there are no power centers in opposition to it.

I can only hope for a prolonged deflationary collapse to clean out the specuvestors, but I doubt that is really coming, and at any rate their money is better than mine.

bubblesitter says

Nope. Rent is month to month and that is it. Mortgage is the commitment for 360 months. Big,big difference.

Nope. Obviously most have 6 mo, 1yr, 2 yr leases, but the real point is regardless of your lease term, housing payments are a commitment for life.

toothfairy says

I like to use New York City as an example of how prices can go up when the average person cant afford a home.

The median income in Manhattan is 47k. The median house price is 1.4 million and thats not even a house its a condo.

That's 100% true. Hence why in Manhattan is the exact opposite of the rest of the country: Renters outnumber homeowners. Everywhere else, homeowners outnumber renters.

Bellingham Bob says

Money doesn't buy mortgages

I could have made it simpler by saying houses instead of mortgages.

Bellingham Bob says

I can only hope for a prolonged deflationary collapse to clean out the specuvestors, but I doubt that is really coming, and at any rate their money is better than mine.

I agree. Specuvestors makes most out of the would be naive buyers. What I am sure of is that their profit margin will keep shrinking as move further into the decline of house prices.

bubblesitter says

all of the court house auction should be won by the investors but most goes back to bank,so in the end your theory of investors flush with cash is nothing but a baloney

no, you don't understand that banks set the starting bid price at these auctions.

often they are too high for the sharks to get interested.

APOCALYPSEFUCK is Tony Manero says

Up?

Ha!

Hahaha!

Hahahahahahahahahahahahaha!

bingo! hahahahahahahahahaha!

tdeloco says

So if one has the cash, how does one bid? Please just nudge me in the right direction.

Go to your County recorders office. find the name of the local paper that publishes constructive notice of foreclosures.

As far as a percentage reduction off retail, or Market or BOOK value, etc. . What a crock... Ask a Real Estate Appraiser where values will bottom ! Those poor PROs... They get a "comp" a typical house that sold recently for a particular number, tell the bank to loan that much and bingo next week the value is another big % less. Do you think the bank will hire that appraiser in the future ? What's wrong with this picture ?

Study up on buying foreclosed property. surprises can be costly. Hidden Repairs, unrecorded liens, etc.

Housing construction has stalled significantly. As the US population increases, demand for housing will continue to increase at a higher rate than supply, eventually causing prices to increase.

BobbyS says

As the US population increases

BobbyS says

eventually causing prices to increase.

This despite decline in incomes? Where will consumer get all the extra money? Borrow from bank? But they are steadily decreasing all the HELOC and cc limits. Think about it.

bubblesitter says

BobbyS says

As the US population increases

BobbyS says

eventually causing prices to increase.

This despite decline in incomes? Where will consumer get all the extra money? Borrow from bank? But they are steadily decreasing all the HELOC and cc limits. Think about it.

The few wealthy property owners will play music house with one another while the masses will pay a large portion of their income on rent.

bubblesitter says

This despite decline in incomes

Will you PLEASE stop this nonsense. Incomes are NOT decreasing.

http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm

tatupu70 says

bubblesitter says

This despite decline in incomes

Will you PLEASE stop this nonsense. Incomes are NOT decreasing.

http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm

Incomes are decreasing due to high underemployment and outsourcing taputu, just not in all sectors. At times of high unemployment it's easy for businesses to offer lower wages with so many applicants.

Last time I put an ad on craigslist for a temporary opening I got swarmed with people wanting that gig. In some places it is pretty bad out there. People don't make the money, so they don't spend it. And businesses can't hire because there isn't a demand, can't hire someone to twirl their thumbs all day.

FortWayne says

Incomes are decreasing due to high underemployment and outsourcing taputu, just not in all sectors. At times of high unemployment it's easy for businesses to offer lower wages with so many applicants

Did you click on the link?

True, fewer young Americans can afford a house; they could afford one if they stop wasting time and money on "mindless fun" like facebook and iPhone.

But there are plenty of Cash lying around, they are just sitting on the sideline and particularly not buying houses. America's printing press has been working overtime. The quantity of US$ greenback has increased tremendously since US adopted fiat money. You can tell by the sudden change of the price of Gold here www.nma.org/pdf/gold/his_gold_prices.pdf

Two important measures of value should be used. One is the study by Prof. Shiller, "real" house prices havent changed since 1800's. The second is the study by Prof. Siegel, "real" Gold prices havent changed much since 1800's, may be 0.2% rate of change.

I combine these 2 facts and use them to compute price of house in oz of Gold. I get median house price here... http://www.census.gov/hhes/www/housing/census/historic/values.html

1950, US median house price=$7354=211ozGold. California price=$9564=275ozGold.

2000, US price=$160,100=282ozGold.

2010, US price=218,000=195ozGold. If I use 275oz of Gold as the median price for California, the median house price today should be $495,800.

As the house prices stand today, it is approximately "normal". And there are plenty of Cash waiting to buy them, but not yet.