Hello All
Going to keep it simple today. Yesterday I discussed housing prices and why they must revert to the mean before the housing market stabilizes. I also discussed my frustrations around our government's constant attempts to prevent this from happening.
Glenn Beck did an awesome piece around this last week, and I wanted to share it with you. Throughout time we have seen bubbles and busts in the housing market. The end result is always the same: Housing prices ALWAYS revert back to the mean.
It will be no different this time folks. Whats scary here is look how much further housing prices must drop before we get back to reality. Imagine what the ramifications of this will be in terms of unemployment and bank losses as we painfully move back to reality.
The bailouts will not stop this process from happening. All they will do is delay the inevitable and dig us deeper into debt. Anyone thinking we will see a recovery before housing gets back to historical pricing levels needs to get their head examined.
Glenn asks an awesome question around Obama's remarks: Does this sound reasonable to you?
5 comments:
Be back tomorrow
Celebrating the holiday today.
Jeff
Jeff-
Did you ever end up buying a place in Baltimore County? For the areas I follow, it seems they're holding up quite well compared to the rest of the country.
This is to say, prices are coming down slowly, but homes are selling, and I don't see many foreclosures or short sales outside of lower income neighborhoods in the county and the 21224 zip code in the city.
I'm starting to think the area is more insulated than others...a two income household with mediocre government jobs can be well north of 200k, which supports prices in many desirable areas.
Flip
I would be in no rush to buy in baltimore. housing prices are down
30% in my area
Prices are crashing on those new construction places in the city.
I would be in no rush flip! Dc prices crashed and its all government jobs down there!
I can't make heads or tails of baltimore housing. It's like the markets lately. I had to buy a place because I started a family and it made sense for taxes and the happy-wife factor. We bought below our means but in a good area in the county, and when we're ready to move it should be a good rental for us (even if our next place is a rental).
But in the last 3 months, I've seen a friend purchase a home in Monkton listed for 900k for around 450k, and then another friend get caught in a multiple bid purchase for an old, outdated rancher in Ruxton for 690k.
In the 21093 zip in my area in my development, nearly identical homes list in the range of 340k - 500k and settlement prices can be at, below, or above list at time of purchase.
FLip
Patience is a virtue.
Rates will be rising on lending as inflation kicks in.
Lets see what these homes go for when the mortgage rates are at 9% or more.
If you are in a strong cash position you are crazy to be buying right now IMO.
Its a tough market but trust me. we have a long way to go on the downside IMO.
I understand the whole wife thingy. They don't like the "stigma" attached to renting.
GL and glad you live in affordable housing.
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