The worlds best loan

[patientlywaiting]

I agree this is a good loan compared to what is available in todays market. Just like some affordable-income programs are good in today’s market.

But considering how much house prices will drop, those financing schemes don’t mean much. Buy a house at a price you can afford not because of financing schemes.

Ex-SD is right; prices will continue to drop for a long time. You’re much better off buying at the low.

[patientlywaiting]

kewp makes an excellent point. I don’t see how American wages can continue rise to support higher housing prices. If anything, nominally higher wages will go to food, gas, clothing, education, health care, and other necessities.

Sure, the skilled workers will see wage inflation but given the pace of globalization, the average American worker will have to compete with skilled workers from around the world. Even routine radiology readings are outsourced to India and Singapore.

[patientlywaiting]

kewp makes an excellent point. I don’t see how American wages can continue rise to support higher housing prices. If anything, nominally higher wages will go to food, gas, clothing, education, health care, and other necessities.

Sure, the skilled workers will see wage inflation but given the pace of globalization, the average American worker will have to compete with skilled workers from around the world. Even routine radiology readings are outsourced to India and Singapore.

[patientlywaiting]

kewp makes an excellent point. I don’t see how American wages can continue rise to support higher housing prices. If anything, nominally higher wages will go to food, gas, clothing, education, health care, and other necessities.

Sure, the skilled workers will see wage inflation but given the pace of globalization, the average American worker will have to compete with skilled workers from around the world. Even routine radiology readings are outsourced to India and Singapore.

[(former)FormerSanDiegan]

Wages are still lagging (real) inflation by a significant amount. And RE inflation by an even more significant amount.

Real Estate Inflation ? That notion is so 2005.

Let’s look at more recent times:

In the past year home prices have dropped by 5% (per Case-Shiller) and incomes have risen by 4% (per brsharma’s post above)

Wage-to-price ratio for homes just corrected 9% nationwide the past 12 months.

[(former)FormerSanDiegan]

Wages are still lagging (real) inflation by a significant amount. And RE inflation by an even more significant amount.

Real Estate Inflation ? That notion is so 2005.

Let’s look at more recent times:

In the past year home prices have dropped by 5% (per Case-Shiller) and incomes have risen by 4% (per brsharma’s post above)

Wage-to-price ratio for homes just corrected 9% nationwide the past 12 months.

[(former)FormerSanDiegan]

Wages are still lagging (real) inflation by a significant amount. And RE inflation by an even more significant amount.

Real Estate Inflation ? That notion is so 2005.

Let’s look at more recent times:

In the past year home prices have dropped by 5% (per Case-Shiller) and incomes have risen by 4% (per brsharma’s post above)

Wage-to-price ratio for homes just corrected 9% nationwide the past 12 months.

[what_a_disasta]

Tamer energy prices? Hardly.

[what_a_disasta]

Tamer energy prices? Hardly.

[what_a_disasta]

Tamer energy prices? Hardly.

[Ex-SD]

“What leads one to conclude that a declining dollar and rampant inflation would put downward pressure on real estate prices. I do not understand the logic of those who hold this view. Is there some sort of mass cognitive dissonance going on ?”

#1. There is too much inventory of unsold/foreclosed homes and it’s going to get a lot larger due to more ARM resets, divorces, job losses, etc. It’s going to take seven or eight years (at a minimum) to get unsold inventory numbers back in line.
#2. Housing in the bubble markets is severely overvalued when compared to the majority of homes in the rest of the country.
#3. Wages for the number of people that it would take to buy a home will not rise nearly enough in 10 years to afford anything more than a $300k median price. That $475k house that he just bought can be bought where I live in SC (in a major city) for around $175k. That’s how much houses are over-inflated in most of CA.

[Ex-SD]

“What leads one to conclude that a declining dollar and rampant inflation would put downward pressure on real estate prices. I do not understand the logic of those who hold this view. Is there some sort of mass cognitive dissonance going on ?”

#1. There is too much inventory of unsold/foreclosed homes and it’s going to get a lot larger due to more ARM resets, divorces, job losses, etc. It’s going to take seven or eight years (at a minimum) to get unsold inventory numbers back in line.
#2. Housing in the bubble markets is severely overvalued when compared to the majority of homes in the rest of the country.
#3. Wages for the number of people that it would take to buy a home will not rise nearly enough in 10 years to afford anything more than a $300k median price. That $475k house that he just bought can be bought where I live in SC (in a major city) for around $175k. That’s how much houses are over-inflated in most of CA.

[Ex-SD]

“What leads one to conclude that a declining dollar and rampant inflation would put downward pressure on real estate prices. I do not understand the logic of those who hold this view. Is there some sort of mass cognitive dissonance going on ?”

#1. There is too much inventory of unsold/foreclosed homes and it’s going to get a lot larger due to more ARM resets, divorces, job losses, etc. It’s going to take seven or eight years (at a minimum) to get unsold inventory numbers back in line.
#2. Housing in the bubble markets is severely overvalued when compared to the majority of homes in the rest of the country.
#3. Wages for the number of people that it would take to buy a home will not rise nearly enough in 10 years to afford anything more than a $300k median price. That $475k house that he just bought can be bought where I live in SC (in a major city) for around $175k. That’s how much houses are over-inflated in most of CA.

[23109VC]

Ex-SD

the house that is 475k here is 175 there.

what is the discrepancy in salaries/incomes.

the guy who makes $100k here – what does he make there? $50? I’m assuming a local job, not someone self employed over the internet who makes the same regardless of where they live…. your average person has to work somehwere, and in general, incomes seem to vary with regions – cost of living varies.. etc.

housing in CA may be way overpriced, but part of why it costs more is that jobs here sometimes tend to pay better than say a job in Arkansas….where that 475k house cost 100k..

[23109VC]

Ex-SD

the house that is 475k here is 175 there.

what is the discrepancy in salaries/incomes.

the guy who makes $100k here – what does he make there? $50? I’m assuming a local job, not someone self employed over the internet who makes the same regardless of where they live…. your average person has to work somehwere, and in general, incomes seem to vary with regions – cost of living varies.. etc.

housing in CA may be way overpriced, but part of why it costs more is that jobs here sometimes tend to pay better than say a job in Arkansas….where that 475k house cost 100k..

[Author]

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