patrick.net

Gary Shilling said this too, but "perception" of home price movement is important. How many people will foreclose on their homes, especially intentionally, if the perception of the public changes to expect a 10% increase in their home values in the coming year?

klarek,

If you think housing in America is overpriced and "fake", so must be EVERYTHING else...the cost of a car, pizza, cellphone, you name it. You are clearly overpaid for whatever you do if you make more than a dollar per year. Fake, fake, fake, fake....to quote Elaine Benes from Seinfeld.

clayfire23 says

In the majority of our country, home prices have actually UNDERPERFORMED that rate of 3% per year over the past 30 years.

Bullshit.

clayfire23 says

If you think housing in America is overpriced and “fake”, so must be EVERYTHING else…the cost of a car, pizza, cellphone, you name it.

No, I think housing is overpriced because the fundamentals do not support the current pricing levels. We've always tracked historically along with inflation yet are still way above that trendline following a massive housing bubble. That means that a) you are lying or ignorant when you said that over 30 years that houses aren't tracking with inflation and b) they are still overpriced. My pizza and cell phone are not. Those sell at market value and aren't purchased on a 30 year loan subject to wild and speculative manipulation. Also unlike your house I don't expect to sell my phone in a few years and score massive profits that I'm not entitled to.

Stop being a whiny little bitch and accept the fact that your house is not worth anywhere near what it was in 2006.

And NO, housing is NOT the backbone of the economy. That's the stupidest thing I've ever heard and it's being peddled out there by lobbyists for home builders and NAR, then spread around by morons such as yourself.

klarek says

No, I think housing is overpriced because the fundamentals do not support the current pricing levels. We’ve always tracked historically along with inflation yet are still way above that trendline following a massive housing bubble. That means that a) you are lying or ignorant when you said that over 30 years that houses aren’t tracking with inflation and b) they are still overpriced. My pizza and cell phone are not. Those sell at market value and aren’t purchased on a 30 year loan subject to wild and speculative manipulation. Also unlike your house I don’t expect to sell my phone in a few years and score massive profits that I’m not entitled to.

I'm still not sure about the inflation tracking. If you're looking at a large enough market (like the US in general), perhaps. But, by that measure, Detroit is wildly undervalued right now. So is much of the Midwest and Deep South. Like all markets, housing prices/values are determined by supply and demand. Those dynamics change with time--some areas become more desirable and some less, and so some areas may rise faster than inflation and some slower.

Comparing the cost of renting with the cost of buying is probably a better guide.

robertoaribas says

Yeah? that applies to sushi too! point being, the pile you drop after eating sushi, and the home you live in do NOTHING to increase the long term productivity of a nation. Like cheap energy, good efficient transportation, emerging technologies do. Thus they are consumtion, NOT production investments.

I disagree there. Having people in houses increases the productivity of our nation. I know that I am much more productive after sleeping in a warm bed than when I sleep on the park bench.

A house isn't an investment. I'll grant you that. But making things and selling them is what our economy is all about. Lots of people have jobs building houses. Not sure what your point is...

tatupu70 says

I’m still not sure about the inflation tracking. If you’re looking at a large enough market (like the US in general), perhaps. But, by that measure, Detroit is wildly undervalued right now.

Yes, I was talking nationally. Regionally prices correspond to GDP levels of that region. For instance, in Detroit where household GDP has tanked due to long-lasting economic problems, the market has fallen there accordingly (and would have had the housing bubble never occurred). In my area, DC, income has risen faster than inflation over the last decade and therefore housing prices are actually fundamentally supported at a level above the inflation curve.

tatupu70 says

Comparing the cost of renting with the cost of buying is probably a better guide.

Agreed. The rental market is generally a more sloppy yet flexible market and a good gauge of where housing prices are. After all, it's the one alternative to owning.

tatupu70 says

I disagree there. Having people in houses increases the productivity of our nation.

It increases the share price of IKEA and Home Depot when they move in. Same as renting. Housing has never traditionally been a large part of our economy, especially not a cornerstone. The housing conglomerates, their lobbies, their propaganda, and banks have convinced many naive people otherwise. And if you look at all the crap coming out of Washington to promote housing, it's pretty easy to see where the money is coming from and who it has helped.

klarek,

What's with all the name calling and foul language? Did I touch a nerve when I suggested that you were overpaid if you made more than a dollar per year? Aaaah, now suddenly, in YOUR area (D.C), house prices are fundamentally supported....riiiiiiight.....You are very inconsistent with your own logic and points.

Tatupu, you on the other hand, make excellent points. I was also referring to the MidWest, Texas etc when I referred to home prices underperforming inflation. and not to the few coastal areas that had above average appreciation. You are also right about higher loan rates not adversely impacting rising home prices. Many countries in Asia have double digit inflation, double digit loan rates, and double digit home price increases per year.

clayfire23 says

What’s with all the name calling and foul language?

I use foul words like "bullshit" when I read comments like yours that are simply not true. As for name-calling, don't dish what you cannot take:

clayfire23 says

You are rejoicing the tremendous suffering that most Americans are facing because of our own self-destruction of this great nation. Shame on you for doing this.

clayfire23 says

Things are going to get extremely bad for ALL of us here in America, thanks to you self-destructors.

clayfire23 says

Aaaah, now suddenly, in YOUR area (D.C), house prices are fundamentally supported….riiiiiiight…..You are very inconsistent with your own logic and points.

I am not being inconsistent at all. National housing prices track inflation. If you want to look at a local area, inflation is less of an indicator than is local household GDP. Trust me, I am a very wary/picky buyer. I'm the type that will make you an offer on your house not based on the overinflated price you're listing it at, but rather what the fundamentals support. For instance, if you purchased it for $320k in 2000 and incomes have risen 25% for that zip/town, I am offering a fair market price of $400k. Then you can piss, moan, cry, and reject it and never find a sucker willing to pay the $500k you want. Too bad, market fundamentals don't support your selfish imaginary wealth predictors.

So the point was that there is a distinction between local markets and the national market. That's not being inconsistent, it's adding fidelity to a pricing model.

klarek,

You are comparing my usage of "self-destructor" to your usage of "moron".....riiiiight...those are the same....

As for my comments not being true, Tatupu already understood and re-stated what I said, and you acknowledged the same somewhere within those conflicting points that you make.

India has had the most ABSURD real estate bubble in the world for many years, but some "expert" folks are finally on to the next most absurd bubble in the world, China....Hopefully, these experts will get to India soon, and then they will realize how unbelievably cheap the United States is....

http://www.marketoracle.co.uk/Article21735.html

http://www.scoop.co.nz/stories/BU1007/S00500.htm

clayfire23 says

You are comparing my usage of “self-destructor” to your usage of “moron”…..riiiiight…those are the same….

A moron is someone that is ignorant. Someone that is ignorant claims that housing prices haven't done better than 3% per year over the last 30 years. My term was correct.

You called us self-destructors, but what have we destroyed? You think the nation as a whole would be better if we all bought as much as we could in 2006 and destroyed our financial lives? You are clinging to a false reality, a world that has been disproven.

You're right though, those two instances of name-calling are not really in the same boat. The one I used for you was correct, the one you used for the rest of us was not.

clayfire23 says

As for my comments not being true, Tatupu already understood and re-stated what I said, and you acknowledged the same somewhere within those conflicting points that you make.

Your remark about home prices was flatly false. Your remark about housing being the backbone of our economy was a half-truth, but half-stupid. You inferred that over-inflated housing prices are the key to economic prosperity in this country, which is NOT what he was saying.

klarek,

My original statement, if you go back and look was "In the majority of our country, home prices have actually UNDERPERFORMED that rate of 3% per year over the past 30 years. While Shiller and Shilling can call out the few places where it went well over the rate of inflation, they should also call out the vast middle of the country where it is actually undervalued".

If you can read well and understand that, you will notice that I did not say that every place in America underperformed inflation. I specifically included the reference to the vast "middle" of the country. I also said that Shiller can call out the places where it appreciated faster than it should have.

Nowhere in my comments have I stated that I expect home prices to grow at a rapid pace or double every 2-3 years like they do in India and China. I do not expect our homeowners to be greedy and expect to make a huge profit. I would be perfectly happy if home prices appreciate at a steady/stable healthy low rate of 2-4% per year, and if homeowners are not deeply underwater like they are now. I have just repeatedly lamented only the LOSS of wealth for current homeowners, not the fact that we are not making a profit. Of course, all of your inconsistent and incoherent replies have implied that I expected massive profits from real estate. It is actually your statements that are totally baseless.

Now that it is obvious that you cannot read or understand things well, I have to lower your annual earnings capacity to 25 cents.

clayfire23 says

If you can read well and understand that, you will notice that I did not say that every place in America underperformed inflation.

You said overall (most places) we have underperformed inflation, which isn't true. I can distinguish between the aggregate and all instances within. I know what you meant, and there is nothing to back that up. Either way, if you are inferring that housing prices are too cheap in flyover states therefore prices should not fall further in San Francisco (otherwise us self-destructors will win), you're wrong. One has nothing to do with the other. If your argument is that indexes like Case Shiller aren't adequate because they misrepresent the flyover areas of the country and you somehow have access to a data source that better captures those figures, why won't you show it?

clayfire23 says

I have just repeatedly lamented only the LOSS of wealth for current homeowners, not the fact that we are not making a profit.

The wealth, that equity, it wasn't meant to be in the first place. If you purchased pre-bubble, you're regret is misplaced unless you thought that 10% or 20% gains were sustainable or deserved.

clayfire23 says

Of course, all of your inconsistent and incoherent replies have implied that I expected massive profits from real estate.

My statements might not be polite or politically correct, but they are coherent and consistent. And yes, all the whining you did in your first comment above implied that you feel inherited to bubble money, which in 2010 you are not.

robertoaribas says

Rhetorical technique aside, klarek makes points. Points you may not agree with, but hardly troll like. Meanwhile Taputookie feels free to ignore my points and call me names on threads…

I don't recall calling you a name. If I did I apologize--it was a hot summer.

What points am I ignoring? Disagreeing is different than ignoring.

klarek is way too inconsistent and incoherent and makes no clear points. Sure, every place in America is a bubble except where he lives...that alone proves his worth or the lack of it. The only thing consistent about his posts is that he attacks everyone and self-proclaims the title of being the genius on the blog.

clayfire23 says

klarek is way too inconsistent and incoherent and makes no clear points. Sure, every place in America is a bubble except where he lives…that alone proves his worth or the lack of it. The only thing consistent about his posts is that he attacks everyone and self-proclaims the title of being the genius on the blog.

Dude.... jesus I already explained that the "not here" phenomenon is something I am very used to here and dismiss. The difference is that it's not all or nothing. That is, there are market fundamentals that can change the economy of one region versus another. Detroit's economy is ravaged by a depleted auto industry, it will suffer certain long term economic growth. George Bush's war on terror etc. creates a climate of job growth in the DC area. Gee, which one will sustain housing price increases more than the other.

That aside, it's not enough to keep housing bubble prices intact. In fact, your original complaint about "boo-hoo we need housing prices UP" is something that around my neck of the woods is really laughable, something I hear all the time when I argue that housing prices are way too high. People think that because of higher than average income growth, a bubble market should be sustainable, which it is not.

But that is an aside. I was expressing the difference and granularity of one particular market versus the aggregate. It obviously went completely over your head (aka "incoherent").

It wasn't inconsistency, you are just lashing out against something you don't get.

So you have now turned from "fundamentally supported" prices in the D.C. area to "not enough to keep prices intact" there. You cannot keep a consistent thought on even your own area, so use that 25 cents that you earn per year to get yourself some grade level education.

clayfire23 says

So you have now turned from “fundamentally supported” prices in the D.C. area to “not enough to keep prices intact” there.

Did I say that? No. In fact, prices as they are right now in my region are unsupported by the fundamentals. Work on your reading comprehension. Income is a core fundamental. Some markets have different changes in income compared to others.
I see that by adding any level of fidelity or granularity about different regions or economic phenomena, it merely confuses you and makes you think it's inconsistent.

You were bitching about people here wishing ill upon others, schadenfreude. Sorry, it's called "I don't want to be ripped off, fall into the same trap as others have and screw myself". You clearly have no grasp at all about economics or the bubble and its deflation. To attack people on their views about something you're clueless about is unfair.

This is really basic economics, such that only a fucking retard shouldn't be able to understand.

Nomograph says

clayfire23 says

klarek is way too inconsistent and incoherent and makes no clear points. Sure, every place in America is a bubble except where he lives…

100% agree. The guy is all over the place, presents ZERO facts, and appears to be running on pure emotion.

I've referenced CS and CC indexes a number of times. I've mentioned GDP growth rates, inflation, interest rates, and tax credits. Just because any or all of that is over your head doesn't mean they aren't data or that the facts are insufficient. They just are for you.

klarek says

Income is a core fundamental. Some markets have different changes in income compared to others.

Just curious. What fundamental do you use for median income/price ratio? Does this ratio change as income increases? How about as interest rates change?

tatupu70 says

Just curious. What fundamental do you use for median income/price ratio?

It changes with interest rates, FHA rules, etc. I don't believe in any general rule of thumb. When people shift slowly from 15 year loans to 30, or to 40, it changes. You just have to look at the indexes and the stats on mortgages issued to get a sense if the fundamentals and prices line up. Traditionally, they have. But right now we're in the 15th inning of pretend and extend.

tatupu70 says

Does this ratio change as income increases?

In a sense, yes. People making a lot of money can afford a mortgage as a higher percentage of their income than someone making $50k a year. Does it change as incomes across the board increase? I don't think so.

tatupu70 says

How about as interest rates change?

Definitely. A guy with an 8% interest rate can afford 25% less than a guy with a 5% interest rate. All other arguments aside, the leveraged purchasing power depends greatly upon that.

clayfire23 says

What I do not understand about many of you folks on this board is your obvious “joy” in seeing home prices falling and more average Americans losing a lot of our wealth and jobs. You are rejoicing the tremendous suffering that most Americans are facing because of our own self-destruction of this great nation. Shame on you for doing this.
It is not just the ultra-wealthy that have suffered in this country. Most of the middle class which purchased homes in the last 10-20 years has seen their equity disappear.

That is their own fault for believing their homes would make them rich. That "equity" was a delusion. The bubble was not sustainable. It's disingenuous to cite the "equity" of extremely overvalued real estate, because being overvalued is only a temporary condition.

Nobody is paying a single dime more for their mortgage than they AGREED to pay. Equity has nothing to do with it. If they agreed to pay too much, that is their own fault. They obviously thought it was a good deal at the time; why isn't it now? Because they know they could get something cheaper now?

I'm sorry that people got locked into deals that they don't like now, and I wish it hadn't happened, but why should I have to suffer for other people's mistakes? You seem to expect that we should all have to pay higher prices so that homeowners have to "suffer" less. How is that fair? Will you help me pay my rent? Will you help me buy a house? No, you won't do that. So why should I help you?

I lost my job too. What is the government doing to help me? Why do you only qualify for help if you own a house?

This is unfair. Shame on YOU for defending it.

The loss in US housing wealth suffered by homeowners, which is still the majority of our population, is over 10 trillion in just the past few years, far surpassing other wasteful government spending measures. America’s homes are already the cheapest in the world when comparing size, features, quality and surrounding infrastructure, median income and yet, you guys expect a 3000 sqft palace of gold to cost just a few pennies just in America, while you are completely ok with a small 500 sqft 1BR apartment selling for a million dollars in other parts of the world.

Comparing U.S. home prices to other countries is pointless. There are too many variables, like population density. What makes sense is to compare prices now to historical norms in THIS country.

I have said this before, and I repeat. Housing is the backbone of every economy, and the rest of the world knows it well. China’s government sponsors heavy appreciation in its own housing values to keep its economy strong. India has the most ABSURD housing bubble in the world. We in America are self-destructing our already cheap housing. Unlike many “experts” who believe that strong jobs create a strong housing market, I believe it is the other way around. A strong housing market gives homeowners a strong sense of wealth and encourage them to spend on a lot of things, resulting in a vibrant economy which then leads to stable jobs.

Oh, I ABSOLUTELY disagree. You haven't learned anything from this disaster. The problem was, we tried to expand the economy by inflating the housing market, and that is precisely why it crashed. There were no fundamentals to support the prices. A solid economy has to be based on producing tangible things of value, not trading houses back and forth and counting numbers on computers. This housing bust is the best proof you could find.

klarek says

You just have to look at the indexes and the stats on mortgages issued to get a sense if the fundamentals and prices line up. Traditionally, they have. But right now we’re in the 15th inning of pretend and extend

Help me out-so what are you looking at right now that makes you think the fundamentals and prices aren't lining up?

tatupu70 says

Help me out-so what are you looking at right now that makes you think the fundamentals and prices aren’t lining up?

I am eating a bean burrito and not looking at anything right now. I've played with it all on spreadsheets: the income levels, the housing levels, the affordability based on different interest rates, the shifting of the populace to 30 year loans from 15 year loans, etc. I haven't built a model with certain fidelity, but my own opinion is that national prices are not supported by the fundamentals. Just look at GDP levels now versus ten years ago and compare that to the housing prices now versus then. It really doesn't take a lot of digging around to get the gist of it.

CS housing composite index is at 148.91. Ten years ago, it was at 107.77. I'm not going to spend an hour crawling through GDP data for you folks, but suffice to say that income levels are more or less what they were ten years ago, adjusted for inflation.

tatupu70 says

You provide nothing and when asked you call the poster a lazy fuck.

Because if he weren't an asshole and actually had cared, he would have read up on it himself. There's a difference between absorbing the information versus having it all bookmarked and ready for every asshole that wants to challenge it It's like asking someone to dig up data to prove the sun always rises in the morning and sets in the evening. They're either trolling or they are a lazy fuck that hasn't bothered figuring it out for themselves. If he had something contrary to the point, I might care enough to dig through economic reports and charts for a half an hour. Why the fuck would I do that for an ignorant prick that rips on me for eating a burrito? Let him remain uninformed.

robertoaribas says

Strange, how that “pendulum stopped” at the EXACT second buyers started getting tax credits, and appears to have restarted that swing since it ended…

Obviously a coincidence. A one-in-a-hundred coincidence.

Klarek...your own quote was "In my area, DC, income has risen faster than inflation over the last decade and therefore housing prices are actually fundamentally supported at a level above the inflation curve.". Every time you post, it is clear that you are just raving mad and have no idea of what you yourself said just minutes ago. Just go back and read your own inconsistent comments while you are stuffing on another burrito and letting the gas come outta your mouth too...

And you whine and call others terrible names because they asked YOU for data. How ironic is that you were asking me for data yourself in this quote of yours from just this afternoon? "If your argument is that indexes like Case Shiller aren’t adequate because they misrepresent the flyover areas of the country and you somehow have access to a data source that better captures those figures, why won’t you show it?"

I guess it is just everyone else that is lazy while you are too busy to dig for some data on the vast number of metros in the middle part of our own country.

clayfire23 says

There will be a lot more mad jobless burrito eaters soon.

please note: I did not say it, clayfire did.

robertoaribas says

I guess my ‘limited knowledge’ comes from studying mathematics applied to economics at UC Berkeley…

No kidding !

An understatement if ever I heard one.

clayfire23 says

Klarek…your own quote was “In my area, DC, income has risen faster than inflation over the last decade and therefore housing prices are actually fundamentally supported at a level above the inflation curve.”. Every time you post, it is clear that you are just raving mad and have no idea of what you yourself said just minutes ago. Just go back and read your own inconsistent comments while you are stuffing on another burrito and letting the gas come outta your mouth too…

Okay, let me explain this very slowly for you so you don't get confused. There is nothing inconsistent at all with what I am saying. Contrast two markets:
-Detriot, where GDP and household income have declined due to a market that has eroded over the last ten years
-DC, where since 9/11 there has been a swelling of govt spending and a GDP increase above the national level

Which do you think will have an increase in housing values during the past decade? That does NOT mean that DC prices belong at their bubbled peak. What it means is that it's unrealistic for me as a potential buyer to expect them to fall around here below the inflation-trended line going back into the 90's. The FUNDAMENTALS support an amount SLIGHTLY higher than that (and, in the academic sense, this is bare bones 101-level material that could be taught to a child).

There is not a single inconsistent thing I have said. You just haven't the faintest economic background to process any of it.

clayfire23 says

And you whine and call others terrible names because they asked YOU for data. How ironic is that you were asking me for data yourself in this quote of yours from just this afternoon? “If your argument is that indexes like Case Shiller aren’t adequate because they misrepresent the flyover areas of the country and you somehow have access to a data source that better captures those figures, why won’t you show it?”

Because you made a claim that housing prices in general and within those areas had fallen below the inflation trend over thirty years. I have read up on housing enough over the years and have NEVER heard that before. So all I asked was where that information came from. I'm still waiting.

clayfire23 says

In any case, my first post today was not about klarek or gameisrigged or anyone specific. I strongly believe that we are self-destructing our own country by deflating our already cheap housing using extremely flawed metrics.

Yes, more expensive housing is what our country needs. Everything was so much better when people could take out loans at twenty times their income, refi six months later and swim in a pool of cash. Oh the humanity, we have to live with a housing market that's supported by actual fundamentals rather than a never-ending ponzi scheme of housing prices that go sky-high every year forever.

That's what builds a strong economy, right? Homes that pump out cash? You sound like an economic scholar, really have a firm grasp on what increases the aggregate standard of living and productivity: housing ATMs.

gameisrigged,

I will assume that you are in the middle class. I also remember you stating that you lost your job. You are the exactly the type of person that I see being affected by our own self-destruction. Too bad it has already happened to you.

I have already stated many times my position which is different from most of the "experts". Jobs do NOT drive housing. A strong housing market drives jobs. Not directly, like as in construction jobs. But by producing a stable wealth effect, which leads all consumers, including the middle class which is still the majority in the country, to spend some, which supports all other sectors of the economy. The recession since 2006 is NOT related to jobs disappearing first, but to housing collapsing, which then led to drastically less consumer spending, which then led to job losses. Some folks on this board believe that we should collapse housing even more. Are not the effects of that obvious to everyone?

I have never prescribed bubblicious price rises for homes. I am fine with you guys calling out parts of California and Florida for their excessive growth. I call out India and China as the most absurd bubbles on the planet. I live in the MidWest, where there was never a boom, but there has sure been a bust, leaving home values below inflation. I see plenty of middle class families who have never been greedy losing their equity and then losing their jobs.

A healthy housing market to me is one that appreciates 2-4% in value every year. Too much appreciation leads to speculation and shifting of wealth to just the rich. Too little appreciation destroys the middle class the most.

I have to leave for work, but let me just say this. I find it absurd that we talk about "median home prices" without first defining what a median home itself is. Is that a 8x8 ft tent? A 200 sqft trailer home? I guess it is a 4 BR 2 storey with a huge lot, attached garage, central air and heating, nice roads and neighborhood, good schools, etc. The problem is that we want 5-star luxury housing for everyone, but we want it at a 1-star price. If all that you care about is a home available for everyone at less that 1 time median income, why not just build a whole bunch of 600-sqft condos in every city and sell them for about $25,000.00 each? Surely that will satisfy the folks that want "median house price" to be less than 2 times the median income. A typical person should need only 150 sqft of space, so a 600 sqft condo will easily accommodate a typical family of four. Outside America, that is what people do. And they pay far far more for that small condo than Americans pay for their ultr-luxury housing.

clayfire23 says

The recession since 2006 is NOT related to jobs disappearing first, but to housing collapsing, which then led to drastically less consumer spending, which then led to job losses. Some folks on this board believe that we should collapse housing even more. Are not the effects of that obvious to everyone?

What you are talking about was the end of an embarrassing era of people were cashing out their homes' fake equity in amounts and at a rate that was purely unsustainable. Yes, they spent it on the economy and for a little while, everybody was really pleased. Some saw it for what it was and chose to not partake. It disgusted many people. Everybody else at least realized when the party was over how stupid they all were. This lesson appears to have eluded you.

You know, most people look back on that period with a feeling of sadness, regret, and anger that we as a society could become so stupid. You seem to be the only person that's been asleep for the past four years and is now nostalgic for it. Amazing.

clayfire23 says

Housing is the backbone of every economy

Poppycock. Industry and manufacturing - as in value adding work are the backbone of an economy. Yes, this includes manufacturing or building houses, but that alone is not sufficient.

Borrowing a shit-ton of money to 'buy' a house, and waiting for a greater fool to borrow a bigger shit-ton of money to 'buy' the house from you -- that is nothing more than a speculative ponzi scheme that is doomed to failure. The only ones who make a profit from a ponzi are the ones who get out before it blows up - not the idiots who pile on at the end and make bigger fools of themselves by trying to convince everyone that it isn't over.

The hyperactivity that comes with a speculative bubble creates the illusion that the economy is booming - but eventually the math catches up. Fucking around with 'housing' isn't much of an economy.

idiotwordsofgod also compared walnut creek to beverly hills.

yes, I consider Lafayette a fortress, It is out of reach to 90%-95% of outsiders, the very thing that makes the area attractive. Since it is known for its great school, families with small children(s) covet the area.

My definition of fortress is an area that is out of reach to normal people. Keeping people out based on economic factor is very important to where the well-off purchase and live.

Median family income is around 160K, a tad below the more well known Palo Alto, it's definitely not reachable to the middle class unless the properties are purchased decades ago. No new homes are built there for decades (population was 20K plus in 1970 vs 24K today) so all the features that make it a fortress is there.

clayfire23 says

gameisrigged,
I will assume that you are in the middle class. I also remember you stating that you lost your job. You are the exactly the type of person that I see being affected by our own self-destruction. Too bad it has already happened to you.
I have already stated many times my position which is different from most of the “experts”. Jobs do NOT drive housing. A strong housing market drives jobs. Not directly, like as in construction jobs. But by producing a stable wealth effect, which leads all consumers, including the middle class which is still the majority in the country, to spend some, which supports all other sectors of the economy. The recession since 2006 is NOT related to jobs disappearing first, but to housing collapsing, which then led to drastically less consumer spending, which then led to job losses. Some folks on this board believe that we should collapse housing even more. Are not the effects of that obvious to everyone?

I'm not even going to bother trying to refute this again, since Klarek already did a great job of that, except to say that you didn't address ANY of my points. You simply re-stated your original flawed premise.

I did not lose my job because the housing market collapsed. My losing my job AND the housing market collapsing were BOTH the result of Wall Street influencing government to allow them to engage in a massive ponzi scheme, and abscond with trillions of dollars of wealth that formerly was possessed by the middle class.

The point I made before, and which you did not address, is that the scheme was unsustainable. The proof of its unsustainability is the collapse of the housing market. If, as you seem to think, an economy can be built from the top down, by inflating housing prices, and that jobs and prosperity will follow, then why did it collapse?

And please address my other point, which is what you mean when you say we are "collapsing" or "deflating" housing. You use the words as active verbs, implying that someone (although you haven't stated who, other than to say "we") is engaging in some sort of deliberate process to bring this about. What are you talking about?