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what_a_disasta,

The key part of my comment is the “they couldn’t afford” part, more than “2003”. Prices in 2003 were much more reasonable in most areas, but if they couldn’t afford it then, and didn’t sell by 2006 when prices finally stopped rising, they’ll likely be underwater and/or forced to foreclose or sell at a loss unless their income went way up.

The issue of high inflation, right now at about 2% according to MSN, can be managed IMO with a savings account, CD, or bond that gains at least 5%, to cover inflation and taxes on the interest income.

With the alternatives being the stock market or real estate, I’d take a 2% net gain on cash, over a devaluing house, or a market that goes down on the fed leaving the rate alone.

That’s just me though.

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what_a_disasta,

The key part of my comment is the “they couldn’t afford” part, more than “2003”. Prices in 2003 were much more reasonable in most areas, but if they couldn’t afford it then, and didn’t sell by 2006 when prices finally stopped rising, they’ll likely be underwater and/or forced to foreclose or sell at a loss unless their income went way up.

The issue of high inflation, right now at about 2% according to MSN, can be managed IMO with a savings account, CD, or bond that gains at least 5%, to cover inflation and taxes on the interest income.

With the alternatives being the stock market or real estate, I’d take a 2% net gain on cash, over a devaluing house, or a market that goes down on the fed leaving the rate alone.

That’s just me though.

[cr]

Burbank – prices would have to fall at least 40-50%.

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Burbank – prices would have to fall at least 40-50%.

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Apparently I posted too soon – the DOW went back down as perspective cleared:

http://www.msnbc.msn.com/id/19414289/

Key points:

-Sales of existing homes fell for a third straight month in May, dropping to the lowest level in four years

-The median price of an existing home sold last month fell to $223,700, down 2.1 percent from a year ago – the 10th straight price decline compared with a year ago, the longest stretch on record.

-Sales fell by 0.3 percent in May to a seasonally adjusted annual rate of 5.99 million units

-Sales now stand 10.3 percent below where they were a year ago.

-Sales also fell in the West, dropping 0.8 percent.

-The National Association of Home Builders reported earlier this month that builder sentiment dropped in June to the lowest reading since February 1991

-Trimming their forecasts, the Realtors now expect existing home sales will fall by 4.6 percent this year, down from a previous forecast of a 2.9 percent drop.

-They expect the median price of a home to fall by 1.3 percent this year, which would be the first annual price decline on record.

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Apparently I posted too soon – the DOW went back down as perspective cleared:

http://www.msnbc.msn.com/id/19414289/

Key points:

-Sales of existing homes fell for a third straight month in May, dropping to the lowest level in four years

-The median price of an existing home sold last month fell to $223,700, down 2.1 percent from a year ago – the 10th straight price decline compared with a year ago, the longest stretch on record.

-Sales fell by 0.3 percent in May to a seasonally adjusted annual rate of 5.99 million units

-Sales now stand 10.3 percent below where they were a year ago.

-Sales also fell in the West, dropping 0.8 percent.

-The National Association of Home Builders reported earlier this month that builder sentiment dropped in June to the lowest reading since February 1991

-Trimming their forecasts, the Realtors now expect existing home sales will fall by 4.6 percent this year, down from a previous forecast of a 2.9 percent drop.

-They expect the median price of a home to fall by 1.3 percent this year, which would be the first annual price decline on record.

[cr]

You certainly can’t cover it with one statement but maybe irresponsible Gen-Xers are the result of irresponsible baby boomers?

I don’t think GenX lifestyles are funded by parents as much as they are by debt. A trait taken from their parents who will end up being supported by their kids when they can’t work anymore.

Maybe then GenX will be forced to learn to live responsibly.

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You certainly can’t cover it with one statement but maybe irresponsible Gen-Xers are the result of irresponsible baby boomers?

I don’t think GenX lifestyles are funded by parents as much as they are by debt. A trait taken from their parents who will end up being supported by their kids when they can’t work anymore.

Maybe then GenX will be forced to learn to live responsibly.

[cr]

I think you’re in a situation that a lot, though certainly not a majority, of people in your demographic.

You’re not foolish with your money, and therefor you have not spent more than you should like everyone else, yet you’re wondering why those seemingly making less than you can afford a lifestyle you can’t.

Truth is they probably can’t afford it either. Material possesions are no indication of wealth. On the contrarythey most likely mean nothing more than debt.

I’m in a similar situation, and all I can do is wait it out. In doing so I’m starting to realize renting isn’t such a bad deal.

Prices will come down, and the longer it takes the more you will be making by the time they do.

[cr]

I think you’re in a situation that a lot, though certainly not a majority, of people in your demographic.

You’re not foolish with your money, and therefor you have not spent more than you should like everyone else, yet you’re wondering why those seemingly making less than you can afford a lifestyle you can’t.

Truth is they probably can’t afford it either. Material possesions are no indication of wealth. On the contrarythey most likely mean nothing more than debt.

I’m in a similar situation, and all I can do is wait it out. In doing so I’m starting to realize renting isn’t such a bad deal.

Prices will come down, and the longer it takes the more you will be making by the time they do.

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Too bad they’re competing withthe millions of others hoping for prices to drop so they can some day afford a home.

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Too bad they’re competing withthe millions of others hoping for prices to drop so they can some day afford a home.

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At least the title of the article indicates the author has a clue as to what is happening.

People are funny though. I’m sure most people who have been here for a while now were laughed at when they first said housing is going to crash.

Sentiment is changing, slowly but surely. Those in this poll are still behind reality and probably only believe what their realtor told them.

Money is the one thing the average person should be most logical about, yet it’s emotions that tend to dominate their decisions.

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At least the title of the article indicates the author has a clue as to what is happening.

People are funny though. I’m sure most people who have been here for a while now were laughed at when they first said housing is going to crash.

Sentiment is changing, slowly but surely. Those in this poll are still behind reality and probably only believe what their realtor told them.

Money is the one thing the average person should be most logical about, yet it’s emotions that tend to dominate their decisions.

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I was thinking about the interest rates, and it seems like most people have started accepting the idea that the FED will not lower them again, but still some hold on to hope that they will.

A good analogy I think would be to say, “I’m too drunk to drive now, I better drink some more to sober up.”

Lower rates are a huge part of the problem, either direct or indirect. Applying the root of the problem as a potential solution to it is 100% bass-ackwards.

[Author]

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