patrick.net

most of the filth that left LG and most of SJ landed in Los Banos ... and they have created the same crap in Los Banos that made SJ a crappy place to live. Good news is, they are headed back over the hill. Bad news is, only the ones with jobs that are not professional breeders are going back. THe super-scum are staying put and living off of the tax-payers. Great system huh?

Home prices are still way out of line with wages. in 2000, in many areas, the median home price was about 2.5 times annual salary. Even in bubble markets where home prices have fallen significantly, that still is not the case. The govt cannot prop housing prices up forever so they have to fall more unless foolish Americans are so determined to own they'll do anything.

markw51 says

unless foolish Americans are so determined to own they’ll do anything.

they are. trust me, they are.

There many worthy opinions in this post.

My opinion is that housing has not bottomed and not likely to bottom in 2011. The only fortresses in this market are homes with little or no debt and sufficient income to cover costs. If you can sell your house today for a profit it is an asset if you cannot it is a liability. Jobs are critical to support housing. Thats why the housing market has capitulated in Detroit.

The US government and the FED continue to aggressively support housing through entities and actions like FHA, Fannie Mae and housing credits. Remember the saying "buy the rumor, sell the news." If someone is offering incentives to buy a widget, its not because that widget is in high demand.

They will continue along this course until they need to reduce liquidity to prevent rampant inflation.
Some one knows how long it can continue, not me. 2010 will be an interesting year.

markw51 says

Home prices are still way out of line with wages. in 2000, in many areas, the median home price was about 2.5 times annual salary.

Not around here (SF Bay Area). Prices were 4x incomes in 1997, then doubled by 2000. After 2000, its been rather tough with jobs/income. Salaries today are not that much off from 2000. We been rather flat, with job growth going outside the region.

Does Wells Fargo's move ( => http://online.wsj.com/article/SB125728972492326499.html) make the Alt-A, Option ARM problem less destructive? What if other banks follow through with the same policies?

asdfasdfish says

Does Wells Fargo’s move ( => http://online.wsj.com/article/SB125728972492326499.html) make the Alt-A, Option ARM problem less destructive? What if other banks follow through with the same policies?

It will certainly lower the height of the chart in the OP. Other banks may follow suit. The question however is how much of this debt was securitized. That debt is nearly impossible to restructure because each mortgage is partially owned by several investors. Getting them all to agree on new terms is a nightmare.

markw51 says

in 2000, in many areas, the median home price was about 2.5 times annual salary

In 2000, interest rates were pushing 8%, the FHA limit was, LOL:

http://www.fha-home-loans.com/access_income_limits_fha_loan.htm

income taxes were 10-15% higher, 5% down was the absolute minimum, and the gummint wasn't handing out $8000 to buy a house!

The chart shows some info. that we can deduce opinions about for supply of used homes. That's all. Doesn't include information about buyer demographics or future access to credit. We could have flat or declining prices even if there were zero resets coming.

100% right-on