Shiller on housing: Using the D word

[patientlywaiting]

Bob Shiller said that housing will always, over the long term, represent about the same proportion of income (even as housing stock improves).

I agree with this type of “reversion to the mean.”

[HLS]

The country needs an enema, and it’s coming.

There needs to be a cycle to get people back to reality, without falling victim to marketing and supporting the economy.

1960’s wasnt that long ago, but WOW have attitudes changed.

The expectations and insisting on immediate gratification of several generations needs to be dealt with.

Psychology changed quickly about buying houses, wait until it changes about “investing” in stocks. Watch out below.

[HLS]

The country needs an enema, and it’s coming.

There needs to be a cycle to get people back to reality, without falling victim to marketing and supporting the economy.

1960’s wasnt that long ago, but WOW have attitudes changed.

The expectations and insisting on immediate gratification of several generations needs to be dealt with.

Psychology changed quickly about buying houses, wait until it changes about “investing” in stocks. Watch out below.

[HLS]

The country needs an enema, and it’s coming.

There needs to be a cycle to get people back to reality, without falling victim to marketing and supporting the economy.

1960’s wasnt that long ago, but WOW have attitudes changed.

The expectations and insisting on immediate gratification of several generations needs to be dealt with.

Psychology changed quickly about buying houses, wait until it changes about “investing” in stocks. Watch out below.

[HLS]

The country needs an enema, and it’s coming.

There needs to be a cycle to get people back to reality, without falling victim to marketing and supporting the economy.

1960’s wasnt that long ago, but WOW have attitudes changed.

The expectations and insisting on immediate gratification of several generations needs to be dealt with.

Psychology changed quickly about buying houses, wait until it changes about “investing” in stocks. Watch out below.

[HLS]

The country needs an enema, and it’s coming.

There needs to be a cycle to get people back to reality, without falling victim to marketing and supporting the economy.

1960’s wasnt that long ago, but WOW have attitudes changed.

The expectations and insisting on immediate gratification of several generations needs to be dealt with.

Psychology changed quickly about buying houses, wait until it changes about “investing” in stocks. Watch out below.

[patientrenter]

It’ll be interesting to see how this plays out.

In any reasonably free-market system, house prices in So Cal would go down by 50%. But govt reps, desperate to please the majority of voters, will be pulling every lever in the govt control room to prevent big price decreases.

The govt. “nuclear option” is to just lend unlimited amounts of govt money directly to homeowners. By dialing down the downpayment and income and repayment and other requirements, home prices could be pushed up a lot in the short term, and by a significant amount permanently. Of course the program would eventually take large losses, but dumping future losses on the biggest taxpayers (a small minority of the population) is much preferable to most voters than a current loss in their housing ATM/retirement plan.

Think the nuclear option is just a pipedream? People are already working on it: http://www.bloomberg.com/apps/news?pid=20601109&sid=aBahn5eH_8cI&refer=home. We’re on a knife-edge between 50% drops and a renewal of the madness of the past 10 years.

Patient renter in OC

[patientrenter]

It’ll be interesting to see how this plays out.

In any reasonably free-market system, house prices in So Cal would go down by 50%. But govt reps, desperate to please the majority of voters, will be pulling every lever in the govt control room to prevent big price decreases.

The govt. “nuclear option” is to just lend unlimited amounts of govt money directly to homeowners. By dialing down the downpayment and income and repayment and other requirements, home prices could be pushed up a lot in the short term, and by a significant amount permanently. Of course the program would eventually take large losses, but dumping future losses on the biggest taxpayers (a small minority of the population) is much preferable to most voters than a current loss in their housing ATM/retirement plan.

Think the nuclear option is just a pipedream? People are already working on it: http://www.bloomberg.com/apps/news?pid=20601109&sid=aBahn5eH_8cI&refer=home. We’re on a knife-edge between 50% drops and a renewal of the madness of the past 10 years.

Patient renter in OC

[patientrenter]

It’ll be interesting to see how this plays out.

In any reasonably free-market system, house prices in So Cal would go down by 50%. But govt reps, desperate to please the majority of voters, will be pulling every lever in the govt control room to prevent big price decreases.

The govt. “nuclear option” is to just lend unlimited amounts of govt money directly to homeowners. By dialing down the downpayment and income and repayment and other requirements, home prices could be pushed up a lot in the short term, and by a significant amount permanently. Of course the program would eventually take large losses, but dumping future losses on the biggest taxpayers (a small minority of the population) is much preferable to most voters than a current loss in their housing ATM/retirement plan.

Think the nuclear option is just a pipedream? People are already working on it: http://www.bloomberg.com/apps/news?pid=20601109&sid=aBahn5eH_8cI&refer=home. We’re on a knife-edge between 50% drops and a renewal of the madness of the past 10 years.

Patient renter in OC

[patientrenter]

It’ll be interesting to see how this plays out.

In any reasonably free-market system, house prices in So Cal would go down by 50%. But govt reps, desperate to please the majority of voters, will be pulling every lever in the govt control room to prevent big price decreases.

The govt. “nuclear option” is to just lend unlimited amounts of govt money directly to homeowners. By dialing down the downpayment and income and repayment and other requirements, home prices could be pushed up a lot in the short term, and by a significant amount permanently. Of course the program would eventually take large losses, but dumping future losses on the biggest taxpayers (a small minority of the population) is much preferable to most voters than a current loss in their housing ATM/retirement plan.

Think the nuclear option is just a pipedream? People are already working on it: http://www.bloomberg.com/apps/news?pid=20601109&sid=aBahn5eH_8cI&refer=home. We’re on a knife-edge between 50% drops and a renewal of the madness of the past 10 years.

Patient renter in OC

[patientrenter]

It’ll be interesting to see how this plays out.

In any reasonably free-market system, house prices in So Cal would go down by 50%. But govt reps, desperate to please the majority of voters, will be pulling every lever in the govt control room to prevent big price decreases.

The govt. “nuclear option” is to just lend unlimited amounts of govt money directly to homeowners. By dialing down the downpayment and income and repayment and other requirements, home prices could be pushed up a lot in the short term, and by a significant amount permanently. Of course the program would eventually take large losses, but dumping future losses on the biggest taxpayers (a small minority of the population) is much preferable to most voters than a current loss in their housing ATM/retirement plan.

Think the nuclear option is just a pipedream? People are already working on it: http://www.bloomberg.com/apps/news?pid=20601109&sid=aBahn5eH_8cI&refer=home. We’re on a knife-edge between 50% drops and a renewal of the madness of the past 10 years.

Patient renter in OC

[HLS]

The big boys have already said that they will do whatever it takes to clean up the aftermath of the party.
Think about Times Square on New Years Day. The party was fun, but what a mess to clean up.

Even if they lower rates to 0%, (which won’t happen)
Joe6pack still owes $500K on a house worth $350 today.

The 100% financing that they bought with is no longer available. The pool of potential buyers has disappeared from the horizon, like cockroaches that scramble when the lights go on. They are nowhere in sight.

The house is unsaleable for more than 65% of what they owe.
It’s only a matter of time until walking away becomes the only option, regardless of what the DC clan is saying about wanting to help homeowners save their piece of the American dream.

Like a bottle of milk well past its expiration date, the American dream has soured for many, and will never taste the same. You can’t restore the flavor after it has curdled.

[HLS]

The big boys have already said that they will do whatever it takes to clean up the aftermath of the party.
Think about Times Square on New Years Day. The party was fun, but what a mess to clean up.

Even if they lower rates to 0%, (which won’t happen)
Joe6pack still owes $500K on a house worth $350 today.

The 100% financing that they bought with is no longer available. The pool of potential buyers has disappeared from the horizon, like cockroaches that scramble when the lights go on. They are nowhere in sight.

The house is unsaleable for more than 65% of what they owe.
It’s only a matter of time until walking away becomes the only option, regardless of what the DC clan is saying about wanting to help homeowners save their piece of the American dream.

Like a bottle of milk well past its expiration date, the American dream has soured for many, and will never taste the same. You can’t restore the flavor after it has curdled.

[HLS]

The big boys have already said that they will do whatever it takes to clean up the aftermath of the party.
Think about Times Square on New Years Day. The party was fun, but what a mess to clean up.

Even if they lower rates to 0%, (which won’t happen)
Joe6pack still owes $500K on a house worth $350 today.

The 100% financing that they bought with is no longer available. The pool of potential buyers has disappeared from the horizon, like cockroaches that scramble when the lights go on. They are nowhere in sight.

The house is unsaleable for more than 65% of what they owe.
It’s only a matter of time until walking away becomes the only option, regardless of what the DC clan is saying about wanting to help homeowners save their piece of the American dream.

Like a bottle of milk well past its expiration date, the American dream has soured for many, and will never taste the same. You can’t restore the flavor after it has curdled.

[HLS]

The big boys have already said that they will do whatever it takes to clean up the aftermath of the party.
Think about Times Square on New Years Day. The party was fun, but what a mess to clean up.

Even if they lower rates to 0%, (which won’t happen)
Joe6pack still owes $500K on a house worth $350 today.

The 100% financing that they bought with is no longer available. The pool of potential buyers has disappeared from the horizon, like cockroaches that scramble when the lights go on. They are nowhere in sight.

The house is unsaleable for more than 65% of what they owe.
It’s only a matter of time until walking away becomes the only option, regardless of what the DC clan is saying about wanting to help homeowners save their piece of the American dream.

Like a bottle of milk well past its expiration date, the American dream has soured for many, and will never taste the same. You can’t restore the flavor after it has curdled.

[Author]

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