patrick.net

Big Mac is not a good analogy, because you consume it. I think owning vs renting a car is better. If you can rent the same model car for less than the cost of owning it (depreciation, repairs, etc) then it’s silly to overpay to own it.

Exactly. And just because that car is purchased by somebody who does not bother calculating trade-offs or alternatives that are - logically - more justifiable, it doesn't mean that he's paying what it's actually worth. He's justifying its price at that moment to anybody else that doesn't evaluate it properly like him.

The car thing is actually pretty good. Owning a car is cheaper than leasing the car if you're going to keep the car for a long time, but it 'feels' more expensive because you have the initial up front investment. Leasing has no big upfront costs (or at least much lower ones), but would cost more if you kept renewing the lease on the car until it finally croaked.

If you like a new car (or moving) every 2 years, definitely lease (or rent). If you're in it for a long haul, buying is better. Except when you're in a massive bubble where buying is WAY more expensive than renting. :D

Seriously, if the dealership told you that you can lease this car based on a 20k purchase price, or buy it for 40k. Who would buy the car? But that's what happened with housing. And is still happening.

klarek says

Exactly. And just because that car is purchased by somebody who does not bother calculating trade-offs or alternatives that are - logically - more justifiable, it doesn’t mean that he’s paying what it’s actually worth. He’s justifying its price at that moment to anybody else that doesn’t evaluate it properly like him.

But you make false assumptions there. Just because someone pays more than you would doesn't mean they didn't calculate trade-offs or that they didn't evaluate the purchase logically. It may just mean that they value things differently than you.

We could say that the market is always right at any given time, throw in the towel, and shut this site down. Clearly, we all find some utility in discussing whether housing is going up or down. That is the relevant question.

Now, to the semantics...most people would say that housing in 2006 was overpriced. If someone sold a house in 2006 for $500K that just sold again for $250K, the original seller (at 500K) would not think that they priced it too high (overpriced). Of course, they priced it right for their purposes. But by any objective long term standard, it was either overpriced then or underpriced now. The reason for the short-term price change (on the market) is due to a collective opinion change about what the future price will be.

Wow, you people are still arguing using data during the peak of the U.S. empire, and the world's economic expansion. We're on the verge of a 100+ year change in society; a change from an oil society, and fossil fuel eventually, to something else. Yet you all insist on using the old data.

Whether you are right or wrong within the scope of your argument is irrelevant, your scope is way too small.

This place is beat. Peace Out.

Blindweb says

Wow, you people are still arguing using data during the peak of the U.S. empire, and the world’s economic expansion. We’re on the verge of a 100+ year change in society; a change from an oil society, and fossil fuel eventually, to something else. Yet you all insist on using the old data.
Whether you are right or wrong within the scope of your argument is irrelevant, your scope is way too small.
This place is beat. Peace Out.

Whoa. Who the hell was that?

Landru3000 says

Whoa. Who the hell was that?

Sounds like some beatnik from Santa Cruz. Most likely arguing the use of Hemp as alternative.
Bong Hit!

Blindweb says

This place is beat. Peace Out.

The scary part is, there are lot of people that think like that, luckily, they all live in a farm way out in AZ, armed to the teeth, ready for aliens to take over.

Blindweb says

The only things I see that can save the market are a change in government to socialism or fascism, a miracle energy technology, or the U.S. blowing up the rest of the world leading to a large influx of people.

We need no government change to either (though you seem to allude that would be good).
We need the govt. returning to what it was in FDR/Truman times:
balanced budget; limited entitlements (with high SS age relative to life span); consistent, generous investments into the future - infrastructure development, industrial policy, education, science and technology; vigorous suppression of unamerican activities internally; unapologetic use of overwhelming force against external adversaries; rational and patriotic education; controlling excesses of wealth; focus on domestic energy sources and nuclear power. Some (such as at the "Institute of Historic Review") think that was "fascism". So be it.

We need no miracle energy technology. We need aggressive development of nuclear power (with govt. overriding and removing environmental, NIMBY and other opposition), solar power, unapalogetic use of military force to defend and secure the lawful property and concessions of US oil companies abroad, hydroelectric power where reasonable, and broad latitude for domestic oil and gas drilling. Roughly in that order.

We need not blow up anyone to get large influxes of immigrants, there are more willing than we can take as is. We need a rational points-based immigration policy selecting for skills, youth, wealth, and English proficiency (similar to Canada and Australia with some tweaks) and ENFORCE it by whatever means necessary.

Why the Housing Market is Three Times Worse Than You Think
http://realestate.yahoo.com/promo/why-the-housing-market-is-three-times-worse-than-you-think.html

Add it all up, and NAR's 8.6 month official backlog triples to about two years or so.

Landru3000 says

Blindweb says

Wow, you people are still arguing using data during the peak of the U.S. empire, and the world’s economic expansion. We’re on the verge of a 100+ year change in society; a change from an oil society, and fossil fuel eventually, to something else. Yet you all insist on using the old data.

Whether you are right or wrong within the scope of your argument is irrelevant, your scope is way too small.

This place is beat. Peace Out.

Whoa. Who the hell was that?

Apocalypse with moderate views!

Some shadow inventory economics 101 for 2009 bottom callers:

http://realestate.yahoo.com/promo/why-the-housing-market-is-three-times-worse-than-you-think.html

klarek says

This?

http://finance.yahoo.com/news/Home-prices-fall-for-8th-rb-2501952475.html;_ylt=Al0ZudKgb3H7SXD8fQEq02W7YWsA;_ylu=X3oDMTE1aDdzdHAxBHBvcwMzBHNlYwN0b3BTdG9yaWVzBHNsawNob21lcHJpY2VzZmE-?x=0&sec=topStories&pos=main&asset=&ccode=

Why are people bullish? Because they need a place to live and usually have to pay for that place. Owning isn't for everybody, but honestly, economics aside, don't you get tired of your landlord's nonsense?

sfvrealestate says

Owning isn’t for everybody, but honestly, economics aside, don’t you get tired of your landlord’s nonsense?

I have owned two homes, and I have rented 7 or 8 places. The only "nonsense" I have had to put up with is a landlord trying to charge for damage that I didn't cause (and that worked out OK, but there was some BS involved), and a landlord who is rather cheap on the repairs (but took care of the important things). So, really, I haven't had much landlord nonsense to deal with -- NOTHING compared to the maintenance nonsense that I had to deal with.

Maybe I have gotten lucky, or maybe it's because I'm an excellent tenant and they treat me well to keep me. But honestly, not much nonsense.

klarek says

Amazing, isn’t it? 8th month in a row of declining prices.

Is it? Higher food/gas prices, loans harder to get, the slow job market, people underwater on their current homes, people waiting for the market to bottom out...

StoutFiles says

klarek says

Amazing, isn’t it? 8th month in a row of declining prices.

Is it? Higher food/gas prices, loans harder to get, the slow job market, people underwater on their current homes, people waiting for the market to bottom out…

Throw in the spices of higher rate and govt pullout(if at all it happens) and you know what would happen.