The bottom line on this run-up of prices was greed in one form or another. If the banks had stuck to fundamentals regarding earnings and affordability…it would have kept prices normal. No one could buy something they could not manage financially.
I read recently that the housing bust is not expected to affect the rest of the economy…that real estate and housing is an entity separate from the rest. But how can that be when there is no discretionary income left to pour into the economy. I am not savvy on economics…so I am uncertain what to expect.
Even if you are a lawyer making a very good living and can actually afford $500K for a cr*P property that you don’t want….those homes are way out of reach for lower income people who might settle for that, just to be independent of a landlord. But the median is $50K….they can’t come close to affording that.
THe city of SD is broke and the middle class there is being squashed.
