Someone else rooting for lower housing prices -- George Will:
"One symptom of the 'crisis' is that housing prices have fallen. How far is unclear. Estimates range from 3 percent to 13 percent. Questions arise.
Do young couples struggling to purchase their first homes concur with the sudden consensus that the decline in prices is a national misfortune? The Economist reports: "Monthly payments on a typical house with a 30-year mortgage and 20 percent downpayment were 18.5 percent of the median family's income in February, down from almost 26 percent at the peak -- and close to the historical average.
By this measure of housing affordability, the 'crisis' is welcome.
. . .
"[S]tabilizing" -- i.e., putting an artificial floor under -- housing prices may be necessary to fuel consumption by a public that in the 1980s saved almost 10 cents of every dollar it earned, and in the 1990s saved a nickel, but recently has had a negative savings rate. This will, however, injure some innocent people, such as those young couples waiting to become homeowners. And it will benefit others who have earned an injury, such as speculators and others who bet that the prices of houses would never decline".
6 comments:
Pfffft.... yeah, Arlington was completely immune from the nonsense. I hope the Reatlors post here will ultimately lose there job and ability to pay their internet bills.
AR6728616
Last sale: 08/24/06: $810,000
Zestimate: $690,500
Current price: $375,000
Can't wait to hear what the Realtor spammers here say when there's a glut of sub $400k homes in N. Arlington.
http://www.mcenearney.com/search/listing.php?subloc=map&listing_type=res&listing_key=90000969896&search=Submit&active=1&min_price=250000&max_price=400000&type=Detached&type_listing=res&for_sale=1&miny=38.860895595144&minx=-77.322196392115&maxy=39.025715903254&maxx=-77.07496592995&curr_size=sm&results_per_page=40&order_by=price_low_high&count=80&page_type=all&page=2
The last previous two sales of this house in 2005 and 2006 were more than $200,000 over the county assessment. This on is $180,000 under. There were two sales in 2005, 6 months apart, and the price jumped $178,000.
I don't deny that North Arlington homes prices are capable of falling, or even falling significantly, but it looks like something more might be going on. Fraud? A trashed house? Or was it just buyer stupidity? I'd like to find if there is a "rest of the story."
Note: The assessed value of this house is essentially the same as in 2006 ($555,200 in 2008; $555,500 in 2006) with a slight jump in 2007, so the County doesn't think prices have gone anywhere in the past two years in this area.
uh oh, dont you dare say anything "bad" about N Arlington!!!!
I rarely agree with George Will, but irrational economics is stirring the political pot. Prices going up is not always a good thing.
Prices really cant go up for a while. We need about a decade of inflation in order to get to the current prices.
People are going to have to start paying down their equity, or upgrade their house in order to move up.
No more sit on a house for 2 years then buy something twice as big with the appreciation.
The other thing I hope will end is this belief that every single person needs a house. I see these shows on HGTV where a single person buys a 2500 square foot house for them self, always with 0% down. What a stupid idea. Get a 900 square foot condo if you really dont want to rent.
"'[S]tabilizing' -- i.e., putting an artificial floor under -- housing prices may be necessary to fuel consumption..."
we need to fuel consumption like we need another war.
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