What is really up with the housing market?

2/24/2011:

[Continuing the ongoing “Morning Question of the Day” series…]

Housing market: Where is it going?

A couple tidbits related to Real Estate today:

Will this continue – or will there be a “turnaround” as one “professor” was quoted as saying?

Do you Buy, Sell, Hold or Rent?

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2 Comments on "What is really up with the housing market?"

HansBrix
Member
HansBrix

Ironically the housing market won’t improve until the government STOPS messing around with it. The market needs to clear and that won’t happen while someone keeps prices artificially high.

The other ironic thing about the housing market is that everything the gubbmint does to make ownership “more affordable” – right down to the mortgage interest deduction – only makes it more expensive, which only benefits sellers. Without that deduction for example the same house would have to have a lower price to be as attainable. That stupid recent $8k tax credit just boosted prices for a few months. Case Shiller illustrates this. The only people who benefited were sellers.

And the other piece of conventional wisdom I question is why out sized gains in prices are seen as a good thing. Isn’t that merely transferring wealth from future generations?

So I say generally prices will stay flat to lower for some time with some local variability. In many markets median prices are still out of step with median incomes. Also, cash strapped baby boomers are retiring and selling their homes to prevent their having to eat Friskees Dinner. Then there’s the ruling elites doing all they can to transfer wealth from the middle class to themselves via outsourcing, H1Bs, illegal immigration, etc I can’t see many positives under the market.

YipYap
Member

Friskies actually taste pretty good with ketchup. Keep repeating that to yourself over and over….

[quote comment=”203702″]Ironically the housing market won’t improve until the government STOPS messing around with it. The market needs to clear and that won’t happen while someone keeps prices artificially high. The other ironic thing about the housing market is that everything the gubbmint does to make ownership “more affordable” – right down to the mortgage interest deduction – only makes it more expensive, which only benefits sellers. Without that deduction for example the same house would have to have a lower price to be as attainable. That stupid recent $8k tax credit just boosted prices for a few months. Case Shiller illustrates this. The only people who benefited were sellers. And the other piece of conventional wisdom I question is why out sized gains in prices are seen as a good thing. Isn’t that merely transferring wealth from future generations? So I say generally prices will stay flat to lower for some time with some local variability. In many markets median prices are still out of step with median incomes. Also, cash strapped baby boomers are retiring and selling their homes to prevent their having to eat Friskees Dinner. Then there’s the ruling elites doing all they can to transfer wealth from the middle class to themselves via outsourcing, H1Bs, illegal immigration, etc I can’t see many positives under the market.[/quote]

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