[Ash Housewares]

Rents can’t go up if wages aren’t rising. Wages have been stagnant (or even falling) for the past few years. It’s gotten to the point that government jobs have higher pay than private sector jobs, at least in some fields.

[Ash Housewares]

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[Ash Housewares]

There’s some good stuff in there, but the author loses a lot of credibility in my mind when he speaks of nationalization and the “Amero”.

[Ash Housewares]

“Look at house prices valued in a commodity (oil,gold,copper etc) rather than USD and the prices are going to appear flat or even falling over the bubble period”

That doesn’t matter because the vast majority of houses are purchased with US dollars coming from US jobs. Has your pay been increasing at the rate the dollar falls? Doubt it. But folks like you and I represent the typical player in the housing market, so the dollar remains the correct metric to use when evaluating the increase in home prices.

[Ash Housewares]

“So what happened to the other 24%”

You’re seeing it in higher energy, food, healthcare, etc- all the interesting things that get removed in calculating the “official” inflation rate. Basically everything that comes from a country other than China (which pegs the yuan to the dollar) has gone up.

[Ash Housewares]

I’m still interested to hear what people have to say about this, so I’m bumping it back up.

[Ash Housewares]

El Jefe, you’re treading dangerously close to the “it’s different this time” thinking that we mock so many others for on this site.

I see what you’re saying and it is logical, but since when is this market logical.

[Ash Housewares]

Many of you have probably seen this, so I’m surprised it hasn’t come up in this thread:
http://www.firstamres.com/pdf/Cagan_FireBurn_1104.pdf
This pdf shows the change in home prices by zip code 1987-2004 (for LA), and it clearly shows the high end led the market in slowing down during the last downturn, while the affordable areas were still on fire.

I understand the arguments presented in this thread describing how the low end drops out, then the middle, then finally the high end, but it is hard to argue with the data.

I emailed Dr Cagan a few weeks ago asking if he planned on updating the document to the present, and he said he might in a few months.

[Ash Housewares]

Is anyone actually surprised by the weakening dollar? It’s the easiest way to pay off our debts. Raising taxes is too politically costly, inflation is so much easier. The signs that this is the direction we are headed became crystal clear last spring when the Fed stopped reporting the M3- the broadest measure of inflation- opting to keep only the narrower measures, M2 and M1. See the link below for a clearer explanation of this than I can offer.

The key thing to remember while dollar bashing is that other countries have problems of their own. Trying to pick a strong currency for your investments is like trying to pick the slowest sinking ship.

http://articles.moneycentral.msn.com/Investing/JubaksJournal/FedKillsAKeyInflationGauge.aspx

[Ash Housewares]

I’ve been to Kennesaw; it’s an affluent suburb of Atlanta. The other town in the article in Illinois is losing population, so it is probably suffering from the loss of a major employer. No wonder crime increased. I don’t think the two towns make for a good comparison of the effect of gun laws.

[Ash Housewares]

Thanks for the insight. I wasn’t aware of the 5-year refinance that Bugs mentioned. My question wasn’t specifically focusing on the SoCal market, which I should have made clearer in my first post. The macro factors (dollar weakness/inflation–>higher wages–>higher rents–>increased value of Apt bldgs) apply all across the US. I did some preliminary recon in the San Antonio market about three months ago, but decided the hassles involved with being an absentee owner weren’t worth it.

[Ash Housewares]

Ditto for me; I got that letter verbatim. Still waiting for Feinstein to respond, though. I guess we know who the slacker Senator is.

[Ash Housewares]

There is not CURRENTLY broad support for a bail-out. I wouldn’t be surprised if that changed in the future as more and more people are affected by this. I hope I’m wrong.

[Ash Housewares]

The article describes how prices will rise modestly in ~3/4 of the country, but the median will still show a decrease because of large declines in the metro areas that appreciated rapidly. This does not make sense. The median price in the US is around $220,000, and prices in every metro area that experienced appreciation (and thus is primed for a decline)are significantly higher than the 220k national median. Even if the metro areas decline in price, they will still be more expensive than the national median- so the national median shouldn’t budge. It is the decline in volume at the high end of the market (cities in this case) that shifts the median downward, not a decline of prices in the cities.

[Ash Housewares]

Granted I didn’t read the article above, but I don’t see how the banks benefit by this. They have a profit which they give to a non-profit org so they don’t pay taxes…but eventually the money makes its way back to the bank, at which time they will owe the taxes they avoided at the earlier period.

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