Comments on: Housing Prices Are Still Too High, Says These Charts http://www.mymoneyblog.com/housing-prices-are-still-too-high-says-these-charts.html Personal Finance and Investing Blog Sun, 12 Feb 2012 01:43:13 +0000 hourly 1 By: Justin http://www.mymoneyblog.com/housing-prices-are-still-too-high-says-these-charts.html#comment-166622 Justin Wed, 14 Jul 2010 13:31:18 +0000 http://www.mymoneyblog.com/?p=8295#comment-166622 It all depends. There are so many sites that thrive on the schadenfreude of 'home debtors'. They want nothing more than for housing to go to $0 for whatever reason. In the end, it is a lifestyle decision, not an investment. If you wait forever, you will have wasted some years. For me it is simple math. If you find a house, go to the courthouse and find how much the house sold for about 30-50 years ago. Go to the government inflation website that calculates the increase of any number based on inflation. Do some analysis on the area to see if the economy has been stable/growing/ghost town over the long term. Does it all check out? Then you are not buying an inflated house. You might be off a few thousand, but does it really matter over the course of 15-40 years? It all depends. There are so many sites that thrive on the schadenfreude of ‘home debtors’. They want nothing more than for housing to go to $0 for whatever reason.

In the end, it is a lifestyle decision, not an investment. If you wait forever, you will have wasted some years. For me it is simple math. If you find a house, go to the courthouse and find how much the house sold for about 30-50 years ago. Go to the government inflation website that calculates the increase of any number based on inflation. Do some analysis on the area to see if the economy has been stable/growing/ghost town over the long term. Does it all check out? Then you are not buying an inflated house. You might be off a few thousand, but does it really matter over the course of 15-40 years?

]]> By: TradePlacer.com http://www.mymoneyblog.com/housing-prices-are-still-too-high-says-these-charts.html#comment-166575 TradePlacer.com Tue, 13 Jul 2010 15:34:30 +0000 http://www.mymoneyblog.com/?p=8295#comment-166575 The risk in housing is still to the downside in the US because people are still too leveraged. What would happen if interest rates spike to say 8-10 percent? The risk in housing is still to the downside in the US because people are still too leveraged. What would happen if interest rates spike to say 8-10 percent?

]]> By: Money Obedience http://www.mymoneyblog.com/housing-prices-are-still-too-high-says-these-charts.html#comment-166465 Money Obedience Fri, 09 Jul 2010 20:01:15 +0000 http://www.mymoneyblog.com/?p=8295#comment-166465 House prices have been supported by government programs like the first-time home buyer credit. This has kept prices above long-term trend which tells me that the decline is far from over. A boom usually ends in a bust and not in an orderly decline. Let the market clean itself rather than give us the illusion that the bust can be controlled. Why control the bust when officials let the boom run rampant? If anything, try to control the boom. Then you won't have to work ten times as hard to control the bust. House prices have been supported by government programs like the first-time home buyer credit. This has kept prices above long-term trend which tells me that the decline is far from over. A boom usually ends in a bust and not in an orderly decline. Let the market clean itself rather than give us the illusion that the bust can be controlled. Why control the bust when officials let the boom run rampant? If anything, try to control the boom. Then you won’t have to work ten times as hard to control the bust.

]]> By: finallygettingtoeven http://www.mymoneyblog.com/housing-prices-are-still-too-high-says-these-charts.html#comment-166416 finallygettingtoeven Thu, 08 Jul 2010 19:39:39 +0000 http://www.mymoneyblog.com/?p=8295#comment-166416 As a real estate investor and buyer of sheriff sale homes and foreclosures for many years now ,I have to say that while prices for homes in my area being sold 'person to person' have had a nosebleed, the prices that homes are being offered at the sales by the banks is ridiculously higher than normal. I realize this is due to the poor lending practices they have led and now they are upside down on these homes (which what they have created would have happened whether there had been a downturn in the market or not). The homes simply are not worth what they are trying to recover and may never be again in the future. We are finding that some of these loans are well over 100% LTV more likely creeping into the 110-120%. The lenders in this area caused this problem, as all over the country as well. What will happen in the future is anyone's guess as the books on the banks part now is pretty darn ugly but I think they are just seeing the start of the real mess to come. We are going to have so many homes flooding the market in the years to come that I think the values are going to stay pretty darn low for a long time into the future. Let's hope that I am mistaken... As a real estate investor and buyer of sheriff sale homes and foreclosures for many years now ,I have to say that while prices for homes in my area being sold ‘person to person’ have had a nosebleed, the prices that homes are being offered at the sales by the banks is ridiculously higher than normal.

I realize this is due to the poor lending practices they have led and now they are upside down on these homes (which what they have created would have happened whether there had been a downturn in the market or not).

The homes simply are not worth what they are trying to recover and may never be again in the future. We are finding that some of these loans are well over 100% LTV more likely creeping into the 110-120%. The lenders in this area caused this problem, as all over the country as well.

What will happen in the future is anyone’s guess as the books on the banks part now is pretty darn ugly but I think they are just seeing the start of the real mess to come. We are going to have so many homes flooding the market in the years to come that I think the values are going to stay pretty darn low for a long time into the future.

Let’s hope that I am mistaken…

]]> By: Andy http://www.mymoneyblog.com/housing-prices-are-still-too-high-says-these-charts.html#comment-166406 Andy Thu, 08 Jul 2010 16:05:51 +0000 http://www.mymoneyblog.com/?p=8295#comment-166406 I think if they did a similar chart to #2 but compared the multiple of median income level to mortgage payment, housing would look fairly priced or better. As said above, low rates are supporting the market. In the eighties mortgage rates were sky high and even if rates normalize they probably won't go that high again and stay there, so today your monthly payment supports a much higher home price than in the 80s, something a complete analysis of home valuations needs to consider. I think if they did a similar chart to #2 but compared the multiple of median income level to mortgage payment, housing would look fairly priced or better. As said above, low rates are supporting the market. In the eighties mortgage rates were sky high and even if rates normalize they probably won’t go that high again and stay there, so today your monthly payment supports a much higher home price than in the 80s, something a complete analysis of home valuations needs to consider.

]]> By: JT http://www.mymoneyblog.com/housing-prices-are-still-too-high-says-these-charts.html#comment-166382 JT Wed, 07 Jul 2010 23:29:36 +0000 http://www.mymoneyblog.com/?p=8295#comment-166382 I wonder if the current chart numbers are skewed due to large unemployment and pay cuts. i.e. if the economic recovery happens - housing may be priced right (for normal employment conditions). i.e. Salaries may need to move up as opposed to housing dropping further to restore historical averages. I wonder if the current chart numbers are skewed due to large unemployment and pay cuts. i.e. if the economic recovery happens – housing may be priced right (for normal employment conditions). i.e. Salaries may need to move up as opposed to housing dropping further to restore historical averages.

]]> By: Matt http://www.mymoneyblog.com/housing-prices-are-still-too-high-says-these-charts.html#comment-166381 Matt Wed, 07 Jul 2010 23:17:20 +0000 http://www.mymoneyblog.com/?p=8295#comment-166381 Prices are being supported by ultra-low interest rates. When those rise, house prices will move lower. Prices are being supported by ultra-low interest rates. When those rise, house prices will move lower.

]]> By: Jeff http://www.mymoneyblog.com/housing-prices-are-still-too-high-says-these-charts.html#comment-166371 Jeff Wed, 07 Jul 2010 18:58:50 +0000 http://www.mymoneyblog.com/?p=8295#comment-166371 Agreed. The bubble sites seem like they have something to profit from a housing crash. Thanks for sharing the analysis. It does seem like prices should come down some more. Agreed. The bubble sites seem like they have something to profit from a housing crash.

Thanks for sharing the analysis. It does seem like prices should come down some more.

]]> By: Seamus http://www.mymoneyblog.com/housing-prices-are-still-too-high-says-these-charts.html#comment-166369 Seamus Wed, 07 Jul 2010 18:46:35 +0000 http://www.mymoneyblog.com/?p=8295#comment-166369 I haven't been traveling a lot these days, but I know things in my area of the DC aren't staying on the market long, if they are decent homes. Most homes in my neighborhood are selling within 1-2 weeks. I bought my home a little over a year ago and prices have not changed much. Prices have come down, but mostly in the condo market. Single family homes I don't see sitting long, besides real high end homes or neglected homes. I haven’t been traveling a lot these days, but I know things in my area of the DC aren’t staying on the market long, if they are decent homes. Most homes in my neighborhood are selling within 1-2 weeks. I bought my home a little over a year ago and prices have not changed much. Prices have come down, but mostly in the condo market. Single family homes I don’t see sitting long, besides real high end homes or neglected homes.

]]> By: Jonathan http://www.mymoneyblog.com/housing-prices-are-still-too-high-says-these-charts.html#comment-166367 Jonathan Wed, 07 Jul 2010 17:51:09 +0000 http://www.mymoneyblog.com/?p=8295#comment-166367 @John - Perhaps, but I don't feel like those sites are unbiased. I get the feeling that if housing does turn around, they will be the last to admit it. @John – Perhaps, but I don’t feel like those sites are unbiased. I get the feeling that if housing does turn around, they will be the last to admit it.

]]> By: John http://www.mymoneyblog.com/housing-prices-are-still-too-high-says-these-charts.html#comment-166362 John Wed, 07 Jul 2010 15:11:17 +0000 http://www.mymoneyblog.com/?p=8295#comment-166362 Glad to hear he's still repeating what Patrick.net and others have been saying for years and years: http://patrick.net/housing/crash.html http://www.housingbubblebust.com/ Both of these websites look a little quackish, but have been dead right. And not long after, Ben Jones started this blog: http://thehousingbubbleblog.com/index.html Glad to hear he’s still repeating what Patrick.net and others have been saying for years and years:

http://patrick.net/housing/crash.html

http://www.housingbubblebust.com/

Both of these websites look a little quackish, but have been dead right.

And not long after, Ben Jones started this blog:

http://thehousingbubbleblog.com/index.html

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