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Housing Prices: Chicken Little vs. Pollyanna
Chicken Little
"The sky is falling"
Pollyanna
"what a perfectly lovely, lovely house! How awfully glad you must be you're so rich!"
- No capital gains taxes
- Thick mortgage backed securities market
- Fewer new buyers chasing money
- Falling real estate commissions
- Rising incomes
- Changing commuting patterns
- "breathtaking profit"
- Active Federal Reserve Board
- Industry sensitive to interest rates
- Rising population
- Middle income wages rising in money terms
- Median age rising
- Family size falling
- Rise in ownership of 2nd homes
- Rise in telecommuting
- Home entertainment such as video games eclipsing movies
- Capitalization and standardization of home building industry (e.g. Toll Brothers)
A moderation in an accellerator suggests just a slow-down in the rate of growth of housing prices to me, but don't listen to me--I just cashed out a 40% capital gain in my last house tax free and locked in a super low rate from a private equity mortgage lender and didn't use a real estate agent to buy and used a cut commission agent to sell. Clearly I'm a Pollyanna.
Posted by Sam Dinkin at September 17, 2006 05:35 AM
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Comments
It's possible both conditions are true in different parts of the country. In many areas, southern californian housing prices were just ridiculous.
Which market are you in Mr Dinkin?
Posted by Chris Mann at September 17, 2006 10:54 PM
Austin. We were late to the party.
Posted by Sam Dinkin at September 17, 2006 10:56 PM
Prices are down a tad around where I live. It's not enough to say the sky is falling, though. It is enough that potential new buyers are waiting it out if they can.
Posted by Alfred Differ at September 17, 2006 11:51 PM
New housing costs have gone through the flogging roof, my brother built a house 4 years ago, and it was WAY too expensive for the work, or materials involved, not to mention the . . . whats the rule? 1 year? or is it 8 months or whatever? that require the builder to fix the issues an owner lists.
I wasn't given a timeline as an elect-mech tech, I f'd up and I was responsible the second I f'd up, thats why I didn't F up.
as for "existing home sales" the good thing about that? is it de-values investment property values, meaning lower incomes are buying existing homes thinking that they might be an immediate, rather than an existing investment.
I bet there might be a sell off of existing homes in the next few years, general property is gonna shrink, and home-builders are gonna start hiering 16 year old kids for less than 14 bucks an hour soon.
Sorry, got yappy, and confused, what was the topic?
Posted by Wickedpinto at September 19, 2006 01:11 AM
Wickedpinto: are you one of the new blog comment robots?
Posted by Sam Dinkin at September 19, 2006 08:51 AM
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