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(former)FormerSanDiegan.
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February 14, 2008 at 7:58 AM #153358February 14, 2008 at 7:58 AM #153365
Alex_angel
ParticipantHouses are only worth what people will pay for them bubble or no bubble. Simple economics.
If people didn’t want a $800k home then they wouldn’t buy it.
February 14, 2008 at 7:58 AM #153437ParticipantHouses are only worth what people will pay for them bubble or no bubble. Simple economics.
If people didn’t want a $800k home then they wouldn’t buy it.
February 14, 2008 at 8:50 AM #153073Ex-SD
ParticipantThere are two, little obstacles that buyers and sellers will have to overcome to buy and sell their properties in the bubble markets:
1. Get an appraisal that matches the selling price
2. Get a loan
Without either, you don’t have a sale (unless you have a cash buyer).As prices continue to drop (and drop and drop), rents will also eventually drop. Bugs has it right in his post above.
February 14, 2008 at 8:50 AM #153351ParticipantThere are two, little obstacles that buyers and sellers will have to overcome to buy and sell their properties in the bubble markets:
1. Get an appraisal that matches the selling price
2. Get a loan
Without either, you don’t have a sale (unless you have a cash buyer).As prices continue to drop (and drop and drop), rents will also eventually drop. Bugs has it right in his post above.
February 14, 2008 at 8:50 AM #153368ParticipantThere are two, little obstacles that buyers and sellers will have to overcome to buy and sell their properties in the bubble markets:
1. Get an appraisal that matches the selling price
2. Get a loan
Without either, you don’t have a sale (unless you have a cash buyer).As prices continue to drop (and drop and drop), rents will also eventually drop. Bugs has it right in his post above.
February 14, 2008 at 8:50 AM #153375ParticipantThere are two, little obstacles that buyers and sellers will have to overcome to buy and sell their properties in the bubble markets:
1. Get an appraisal that matches the selling price
2. Get a loan
Without either, you don’t have a sale (unless you have a cash buyer).As prices continue to drop (and drop and drop), rents will also eventually drop. Bugs has it right in his post above.
February 14, 2008 at 8:50 AM #153447ParticipantThere are two, little obstacles that buyers and sellers will have to overcome to buy and sell their properties in the bubble markets:
1. Get an appraisal that matches the selling price
2. Get a loan
Without either, you don’t have a sale (unless you have a cash buyer).As prices continue to drop (and drop and drop), rents will also eventually drop. Bugs has it right in his post above.
February 14, 2008 at 9:10 AM #153088EconProf
ParticipantBobS
gdcox makes a valid point by challenging the income/house price ratio. Since the earlier period had artificially high interest rates, house PAYMENTS were unnaturally high. We all remember that Volcker had to use 15%+ interest rates as a battering ram to wipe out inflation and inflationary psychology. Housing was the collateral damage.
In contrast, the bubble was stimulated by unduly low interest rates for several years under Greenspan.
A better ratio might be income/house payments.February 14, 2008 at 9:10 AM #153366ParticipantBobS
gdcox makes a valid point by challenging the income/house price ratio. Since the earlier period had artificially high interest rates, house PAYMENTS were unnaturally high. We all remember that Volcker had to use 15%+ interest rates as a battering ram to wipe out inflation and inflationary psychology. Housing was the collateral damage.
In contrast, the bubble was stimulated by unduly low interest rates for several years under Greenspan.
A better ratio might be income/house payments.February 14, 2008 at 9:10 AM #153385ParticipantBobS
gdcox makes a valid point by challenging the income/house price ratio. Since the earlier period had artificially high interest rates, house PAYMENTS were unnaturally high. We all remember that Volcker had to use 15%+ interest rates as a battering ram to wipe out inflation and inflationary psychology. Housing was the collateral damage.
In contrast, the bubble was stimulated by unduly low interest rates for several years under Greenspan.
A better ratio might be income/house payments.February 14, 2008 at 9:10 AM #153389ParticipantBobS
gdcox makes a valid point by challenging the income/house price ratio. Since the earlier period had artificially high interest rates, house PAYMENTS were unnaturally high. We all remember that Volcker had to use 15%+ interest rates as a battering ram to wipe out inflation and inflationary psychology. Housing was the collateral damage.
In contrast, the bubble was stimulated by unduly low interest rates for several years under Greenspan.
A better ratio might be income/house payments.February 14, 2008 at 9:10 AM #153462ParticipantBobS
gdcox makes a valid point by challenging the income/house price ratio. Since the earlier period had artificially high interest rates, house PAYMENTS were unnaturally high. We all remember that Volcker had to use 15%+ interest rates as a battering ram to wipe out inflation and inflationary psychology. Housing was the collateral damage.
In contrast, the bubble was stimulated by unduly low interest rates for several years under Greenspan.
A better ratio might be income/house payments.February 14, 2008 at 10:22 AM #153093patientlywaiting
ParticipantI monitor the rental market and I concur with Bugs. There is a lot of resistance to lowering rents, but I see cracks out there. It won’t be long before we see rent reductions (on residential and commmercial).
February 14, 2008 at 10:22 AM #153371ParticipantI monitor the rental market and I concur with Bugs. There is a lot of resistance to lowering rents, but I see cracks out there. It won’t be long before we see rent reductions (on residential and commmercial).
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