I just read part of the “buy and bail†article Patrick has listed on the site. I also remember seeing a site where Realtor’s comments were all but demanding that the US government should only support policies that promote "current" home owners buy a new house at least every 5 years. They were scared of policies that seemed to promote existing house owners stay in their houses longer.
I am wondering if buy and bail almost has to become the new housing market at least for the near future. Realtor’s will have to actually encourage the buy and bail cycle to keep the housing market from all but freezing. Are we trying to support a US housing market that can only be sustained if all or most existing house owners buy a new house every few years?
Could the current US housing market really survive, if existing owners only bought a new house every 15-30 years? How could a future housing market survive where people only moved to a new house based on significant life changes such as a larger or smaller family or new job in another location or a significant increase or decrease of income?
In the recent past people seem to have been buying new houses just as an attempt to cover a mortgage they could not afford with a higher value asset. Sure there were other motives, but the practical plan was to get a mortgage you could not afford because you could gain a higher value asset later to cover the debt.
I am not sure if I really explained fully what I am thinking, but if I do have a clue my conclusion is the housing market has not even begun to fall yet. It is going to be a very long slow fall as the US cycles through a period buy and bail. I think even "new" house buyers could get caught in this cycle as Realtor’s will promote it to ensure almost every marketable house is re-sold at least every 5years. Its not about the sale price, it is about the number of house sales.
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I just read part of the “buy and bail†article Patrick has listed on the site. I also remember seeing a site where Realtor’s comments were all but demanding that the US government should only support policies that promote "current" home owners buy a new house at least every 5 years. They were scared of policies that seemed to promote existing house owners stay in their houses longer.
I am wondering if buy and bail almost has to become the new housing market at least for the near future. Realtor’s will have to actually encourage the buy and bail cycle to keep the housing market from all but freezing. Are we trying to support a US housing market that can only be sustained if all or most existing house owners buy a new house every few years?
Could the current US housing market really survive, if existing owners only bought a new house every 15-30 years? How could a future housing market survive where people only moved to a new house based on significant life changes such as a larger or smaller family or new job in another location or a significant increase or decrease of income?
In the recent past people seem to have been buying new houses just as an attempt to cover a mortgage they could not afford with a higher value asset. Sure there were other motives, but the practical plan was to get a mortgage you could not afford because you could gain a higher value asset later to cover the debt.
I am not sure if I really explained fully what I am thinking, but if I do have a clue my conclusion is the housing market has not even begun to fall yet. It is going to be a very long slow fall as the US cycles through a period buy and bail. I think even "new" house buyers could get caught in this cycle as Realtor’s will promote it to ensure almost every marketable house is re-sold at least every 5years. Its not about the sale price, it is about the number of house sales.
But what do I know.
#housing