Prices

[Misheloff]

OK,

So, any idiot can see that based on ratios (especially P/I), homes in San Diego are still slightly overvalued. Around 20% or so by my estimations, though it depends on what area you’re looking in.

HOWEVER, that doesn’t mean it’s not time to buy.

Paulson and Bernanke have, over the last 30 days, cranked the printing presses on “high.” $2 trillion or so has been thrown at this problem already depending on whom you ask, and it will likely be several times that when all is said and done.

Let’s take a look at what’s going on

(1) Treasury buying up crap mortgages
(2) Treasury buying up banks that own crap mortgages
(3) Treasury loaning money to companies that insure crap mortgages

Hmmm… if I owned a bunch of crap assets, AND had a printing press at the ready what would I do??

So, if you buy a home with a FIXED rate mortgage, the value of a home may not rise in real terms, but as the value of the dollar is being destroyed with rampant inflation, in nominal terms, equity magically appears.

Thoughts?

[SD Realtor]

A few people have pondered about this out loud.

So we have a race don’t we? What is happening quicker, the depreciation of housing or the value of our currency.

Hard to say. I guess it all depends on how much you think the submarket you want to live in will go down. That coupled with your own job security, etc… I tend to think that we will have more depreciation in housing before the hyperinflation people are forecasting will kick in. There may be a sweet spot of being able to get a home at a decent price at a decent rate. It just depends on how successful the government will be at trying to support pricing through various measures over the next 2 years. I don’t think they will be successful but I do think they will throw away a hell of alot of money trying.

[SD Realtor]

A few people have pondered about this out loud.

So we have a race don’t we? What is happening quicker, the depreciation of housing or the value of our currency.

Hard to say. I guess it all depends on how much you think the submarket you want to live in will go down. That coupled with your own job security, etc… I tend to think that we will have more depreciation in housing before the hyperinflation people are forecasting will kick in. There may be a sweet spot of being able to get a home at a decent price at a decent rate. It just depends on how successful the government will be at trying to support pricing through various measures over the next 2 years. I don’t think they will be successful but I do think they will throw away a hell of alot of money trying.

[SD Realtor]

A few people have pondered about this out loud.

So we have a race don’t we? What is happening quicker, the depreciation of housing or the value of our currency.

Hard to say. I guess it all depends on how much you think the submarket you want to live in will go down. That coupled with your own job security, etc… I tend to think that we will have more depreciation in housing before the hyperinflation people are forecasting will kick in. There may be a sweet spot of being able to get a home at a decent price at a decent rate. It just depends on how successful the government will be at trying to support pricing through various measures over the next 2 years. I don’t think they will be successful but I do think they will throw away a hell of alot of money trying.

[SD Realtor]

A few people have pondered about this out loud.

So we have a race don’t we? What is happening quicker, the depreciation of housing or the value of our currency.

Hard to say. I guess it all depends on how much you think the submarket you want to live in will go down. That coupled with your own job security, etc… I tend to think that we will have more depreciation in housing before the hyperinflation people are forecasting will kick in. There may be a sweet spot of being able to get a home at a decent price at a decent rate. It just depends on how successful the government will be at trying to support pricing through various measures over the next 2 years. I don’t think they will be successful but I do think they will throw away a hell of alot of money trying.

[SD Realtor]

A few people have pondered about this out loud.

So we have a race don’t we? What is happening quicker, the depreciation of housing or the value of our currency.

Hard to say. I guess it all depends on how much you think the submarket you want to live in will go down. That coupled with your own job security, etc… I tend to think that we will have more depreciation in housing before the hyperinflation people are forecasting will kick in. There may be a sweet spot of being able to get a home at a decent price at a decent rate. It just depends on how successful the government will be at trying to support pricing through various measures over the next 2 years. I don’t think they will be successful but I do think they will throw away a hell of alot of money trying.

[kewp]

Incomes aren’t rising while housing is falling so I don’t see this as much as a problem.

I think whats happening is money is being destroyed faster than it is being created. Deflation is still the dominant economic force.

Its one thing if the old dollars were being used to buy houses and oil along with the new dollars. That would be inflationary. But the reality is more like the old dollars were burned up in a furnace. The trillions of new dollars are simply taking the place of the missing money.

[kewp]

Incomes aren’t rising while housing is falling so I don’t see this as much as a problem.

I think whats happening is money is being destroyed faster than it is being created. Deflation is still the dominant economic force.

Its one thing if the old dollars were being used to buy houses and oil along with the new dollars. That would be inflationary. But the reality is more like the old dollars were burned up in a furnace. The trillions of new dollars are simply taking the place of the missing money.

[kewp]

Incomes aren’t rising while housing is falling so I don’t see this as much as a problem.

I think whats happening is money is being destroyed faster than it is being created. Deflation is still the dominant economic force.

Its one thing if the old dollars were being used to buy houses and oil along with the new dollars. That would be inflationary. But the reality is more like the old dollars were burned up in a furnace. The trillions of new dollars are simply taking the place of the missing money.

[kewp]

Incomes aren’t rising while housing is falling so I don’t see this as much as a problem.

I think whats happening is money is being destroyed faster than it is being created. Deflation is still the dominant economic force.

Its one thing if the old dollars were being used to buy houses and oil along with the new dollars. That would be inflationary. But the reality is more like the old dollars were burned up in a furnace. The trillions of new dollars are simply taking the place of the missing money.

[kewp]

Incomes aren’t rising while housing is falling so I don’t see this as much as a problem.

I think whats happening is money is being destroyed faster than it is being created. Deflation is still the dominant economic force.

Its one thing if the old dollars were being used to buy houses and oil along with the new dollars. That would be inflationary. But the reality is more like the old dollars were burned up in a furnace. The trillions of new dollars are simply taking the place of the missing money.

[jpinpb]

kewp – that is a good point. The ATM housing money has been spent. That was all borrowed money. This new injection of money is going to cover the already borrowed money. Small example, the stimulus package. How many ran out and injected it into new purchase. I’d go out on a limb and say many just paid bills, credit cards, car payments, etc. Some Piggs probably invested it (hopefully not in stocks like me) or just saved it (some of it).

I don’t think the stimulus package did one thing towards jump-starting the economy, even if a few actually bought something w/it.

I don’t think the 700 billion is anywhere near pulling us out of this hole of debt. We have to get out of the hole of debt before we can think about stimulating the economy.

[jpinpb]

kewp – that is a good point. The ATM housing money has been spent. That was all borrowed money. This new injection of money is going to cover the already borrowed money. Small example, the stimulus package. How many ran out and injected it into new purchase. I’d go out on a limb and say many just paid bills, credit cards, car payments, etc. Some Piggs probably invested it (hopefully not in stocks like me) or just saved it (some of it).

I don’t think the stimulus package did one thing towards jump-starting the economy, even if a few actually bought something w/it.

I don’t think the 700 billion is anywhere near pulling us out of this hole of debt. We have to get out of the hole of debt before we can think about stimulating the economy.

[jpinpb]

kewp – that is a good point. The ATM housing money has been spent. That was all borrowed money. This new injection of money is going to cover the already borrowed money. Small example, the stimulus package. How many ran out and injected it into new purchase. I’d go out on a limb and say many just paid bills, credit cards, car payments, etc. Some Piggs probably invested it (hopefully not in stocks like me) or just saved it (some of it).

I don’t think the stimulus package did one thing towards jump-starting the economy, even if a few actually bought something w/it.

I don’t think the 700 billion is anywhere near pulling us out of this hole of debt. We have to get out of the hole of debt before we can think about stimulating the economy.

[jpinpb]

kewp – that is a good point. The ATM housing money has been spent. That was all borrowed money. This new injection of money is going to cover the already borrowed money. Small example, the stimulus package. How many ran out and injected it into new purchase. I’d go out on a limb and say many just paid bills, credit cards, car payments, etc. Some Piggs probably invested it (hopefully not in stocks like me) or just saved it (some of it).

I don’t think the stimulus package did one thing towards jump-starting the economy, even if a few actually bought something w/it.

I don’t think the 700 billion is anywhere near pulling us out of this hole of debt. We have to get out of the hole of debt before we can think about stimulating the economy.

[Author]

Posts