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April 6, 2011 at 8:17 AM #685141April 6, 2011 at 9:22 AM #683988briansd1Guest
[quote=StaunchLibertarian][quote=sdrealtor]It is all driven by government-limited supply and government-supported demand.
[/quote]Fixed your post.
On the supply side, government is limiting supply by propping up banks who would otherwise implode and release their REO inventory onto the market.
On the demand side, Fannie and Freddie are still over 90% of the mortgage market. Remove those two and demand (along with housing prices) would crater.[/quote]
I agree that government is very successful at manipulating housing.
I believe that the housing market is momentum driven, nothing really based on fundamentals.
Reality is that, in the short to medium term, housing is good driver of economic activity and GDP. When the politicians need an economic boost they implement policies that support housing. The policies then feed on themselves creating an industrial complex. You may already have noticed the NAR ads in support of housing subsidies.
Regardless of prices, some people will always buy and make sacrifices in other areas in order to buy.
I believe that the government should be focused on the proper allocation of resources instead of supporting housing.
IMHO, the most important factor affecting San Diego and other high-cost housing markets is the availability of large loans. Reduce the limit to something like $250k, and prices will come down. Builders will build cheaper houses — suply and demand (demand includes the willingness and ABILITY to pay).
April 6, 2011 at 9:22 AM #684039briansd1Guest[quote=StaunchLibertarian][quote=sdrealtor]It is all driven by government-limited supply and government-supported demand.
[/quote]Fixed your post.
On the supply side, government is limiting supply by propping up banks who would otherwise implode and release their REO inventory onto the market.
On the demand side, Fannie and Freddie are still over 90% of the mortgage market. Remove those two and demand (along with housing prices) would crater.[/quote]
I agree that government is very successful at manipulating housing.
I believe that the housing market is momentum driven, nothing really based on fundamentals.
Reality is that, in the short to medium term, housing is good driver of economic activity and GDP. When the politicians need an economic boost they implement policies that support housing. The policies then feed on themselves creating an industrial complex. You may already have noticed the NAR ads in support of housing subsidies.
Regardless of prices, some people will always buy and make sacrifices in other areas in order to buy.
I believe that the government should be focused on the proper allocation of resources instead of supporting housing.
IMHO, the most important factor affecting San Diego and other high-cost housing markets is the availability of large loans. Reduce the limit to something like $250k, and prices will come down. Builders will build cheaper houses — suply and demand (demand includes the willingness and ABILITY to pay).
April 6, 2011 at 9:22 AM #684668briansd1Guest[quote=StaunchLibertarian][quote=sdrealtor]It is all driven by government-limited supply and government-supported demand.
[/quote]Fixed your post.
On the supply side, government is limiting supply by propping up banks who would otherwise implode and release their REO inventory onto the market.
On the demand side, Fannie and Freddie are still over 90% of the mortgage market. Remove those two and demand (along with housing prices) would crater.[/quote]
I agree that government is very successful at manipulating housing.
I believe that the housing market is momentum driven, nothing really based on fundamentals.
Reality is that, in the short to medium term, housing is good driver of economic activity and GDP. When the politicians need an economic boost they implement policies that support housing. The policies then feed on themselves creating an industrial complex. You may already have noticed the NAR ads in support of housing subsidies.
Regardless of prices, some people will always buy and make sacrifices in other areas in order to buy.
I believe that the government should be focused on the proper allocation of resources instead of supporting housing.
IMHO, the most important factor affecting San Diego and other high-cost housing markets is the availability of large loans. Reduce the limit to something like $250k, and prices will come down. Builders will build cheaper houses — suply and demand (demand includes the willingness and ABILITY to pay).
April 6, 2011 at 9:22 AM #684810briansd1Guest[quote=StaunchLibertarian][quote=sdrealtor]It is all driven by government-limited supply and government-supported demand.
[/quote]Fixed your post.
On the supply side, government is limiting supply by propping up banks who would otherwise implode and release their REO inventory onto the market.
On the demand side, Fannie and Freddie are still over 90% of the mortgage market. Remove those two and demand (along with housing prices) would crater.[/quote]
I agree that government is very successful at manipulating housing.
I believe that the housing market is momentum driven, nothing really based on fundamentals.
Reality is that, in the short to medium term, housing is good driver of economic activity and GDP. When the politicians need an economic boost they implement policies that support housing. The policies then feed on themselves creating an industrial complex. You may already have noticed the NAR ads in support of housing subsidies.
Regardless of prices, some people will always buy and make sacrifices in other areas in order to buy.
I believe that the government should be focused on the proper allocation of resources instead of supporting housing.
IMHO, the most important factor affecting San Diego and other high-cost housing markets is the availability of large loans. Reduce the limit to something like $250k, and prices will come down. Builders will build cheaper houses — suply and demand (demand includes the willingness and ABILITY to pay).
April 6, 2011 at 9:22 AM #685161briansd1Guest[quote=StaunchLibertarian][quote=sdrealtor]It is all driven by government-limited supply and government-supported demand.
[/quote]Fixed your post.
On the supply side, government is limiting supply by propping up banks who would otherwise implode and release their REO inventory onto the market.
On the demand side, Fannie and Freddie are still over 90% of the mortgage market. Remove those two and demand (along with housing prices) would crater.[/quote]
I agree that government is very successful at manipulating housing.
I believe that the housing market is momentum driven, nothing really based on fundamentals.
Reality is that, in the short to medium term, housing is good driver of economic activity and GDP. When the politicians need an economic boost they implement policies that support housing. The policies then feed on themselves creating an industrial complex. You may already have noticed the NAR ads in support of housing subsidies.
Regardless of prices, some people will always buy and make sacrifices in other areas in order to buy.
I believe that the government should be focused on the proper allocation of resources instead of supporting housing.
IMHO, the most important factor affecting San Diego and other high-cost housing markets is the availability of large loans. Reduce the limit to something like $250k, and prices will come down. Builders will build cheaper houses — suply and demand (demand includes the willingness and ABILITY to pay).
April 6, 2011 at 9:36 AM #683993ScarlettParticipant[quote=briansd1]IMHO, the most important factor affecting San Diego and other high-cost housing markets is the availability of large loans. Reduce the limit to something like $250k, and prices will come down. Builders will build cheaper houses — supply and demand (demand includes the willingness and ABILITY to pay).[/quote]
Yes, that’s a very good idea. Why don’t they? 250K seems pretty reasonable for regular loans and rates if you have 15-20% down. And jumbo loans should be between 250K and 417K.
April 6, 2011 at 9:36 AM #684044ScarlettParticipant[quote=briansd1]IMHO, the most important factor affecting San Diego and other high-cost housing markets is the availability of large loans. Reduce the limit to something like $250k, and prices will come down. Builders will build cheaper houses — supply and demand (demand includes the willingness and ABILITY to pay).[/quote]
Yes, that’s a very good idea. Why don’t they? 250K seems pretty reasonable for regular loans and rates if you have 15-20% down. And jumbo loans should be between 250K and 417K.
April 6, 2011 at 9:36 AM #684673ScarlettParticipant[quote=briansd1]IMHO, the most important factor affecting San Diego and other high-cost housing markets is the availability of large loans. Reduce the limit to something like $250k, and prices will come down. Builders will build cheaper houses — supply and demand (demand includes the willingness and ABILITY to pay).[/quote]
Yes, that’s a very good idea. Why don’t they? 250K seems pretty reasonable for regular loans and rates if you have 15-20% down. And jumbo loans should be between 250K and 417K.
April 6, 2011 at 9:36 AM #684815ScarlettParticipant[quote=briansd1]IMHO, the most important factor affecting San Diego and other high-cost housing markets is the availability of large loans. Reduce the limit to something like $250k, and prices will come down. Builders will build cheaper houses — supply and demand (demand includes the willingness and ABILITY to pay).[/quote]
Yes, that’s a very good idea. Why don’t they? 250K seems pretty reasonable for regular loans and rates if you have 15-20% down. And jumbo loans should be between 250K and 417K.
April 6, 2011 at 9:36 AM #685166ScarlettParticipant[quote=briansd1]IMHO, the most important factor affecting San Diego and other high-cost housing markets is the availability of large loans. Reduce the limit to something like $250k, and prices will come down. Builders will build cheaper houses — supply and demand (demand includes the willingness and ABILITY to pay).[/quote]
Yes, that’s a very good idea. Why don’t they? 250K seems pretty reasonable for regular loans and rates if you have 15-20% down. And jumbo loans should be between 250K and 417K.
April 6, 2011 at 9:51 AM #684003anParticipant[quote=CA renter]
The last RE cycle topped in ~1989/1990, so that ratio would make sense for 1990. Prices in some very desirable areas crashed ~40% during the downturn of the early 90s, at they didn’t have this massive credit bubble to contend with.To be sure, things are MUCH better today than they were in ~2004-2007, but when you consider the very large risks to our economy, I think things are still priced optimistically.[/quote]
You seem to discount the interest rate. The ratio of price to income is similar to 1990, yet in 1990, interest rate was much higher. What do you think that ratio would be if people in 1990 can get <5% 30 year fixed rates?April 6, 2011 at 9:51 AM #684054anParticipant[quote=CA renter]
The last RE cycle topped in ~1989/1990, so that ratio would make sense for 1990. Prices in some very desirable areas crashed ~40% during the downturn of the early 90s, at they didn’t have this massive credit bubble to contend with.To be sure, things are MUCH better today than they were in ~2004-2007, but when you consider the very large risks to our economy, I think things are still priced optimistically.[/quote]
You seem to discount the interest rate. The ratio of price to income is similar to 1990, yet in 1990, interest rate was much higher. What do you think that ratio would be if people in 1990 can get <5% 30 year fixed rates?April 6, 2011 at 9:51 AM #684683anParticipant[quote=CA renter]
The last RE cycle topped in ~1989/1990, so that ratio would make sense for 1990. Prices in some very desirable areas crashed ~40% during the downturn of the early 90s, at they didn’t have this massive credit bubble to contend with.To be sure, things are MUCH better today than they were in ~2004-2007, but when you consider the very large risks to our economy, I think things are still priced optimistically.[/quote]
You seem to discount the interest rate. The ratio of price to income is similar to 1990, yet in 1990, interest rate was much higher. What do you think that ratio would be if people in 1990 can get <5% 30 year fixed rates?April 6, 2011 at 9:51 AM #684825anParticipant[quote=CA renter]
The last RE cycle topped in ~1989/1990, so that ratio would make sense for 1990. Prices in some very desirable areas crashed ~40% during the downturn of the early 90s, at they didn’t have this massive credit bubble to contend with.To be sure, things are MUCH better today than they were in ~2004-2007, but when you consider the very large risks to our economy, I think things are still priced optimistically.[/quote]
You seem to discount the interest rate. The ratio of price to income is similar to 1990, yet in 1990, interest rate was much higher. What do you think that ratio would be if people in 1990 can get <5% 30 year fixed rates? -
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