Why Are Falling Prices For Shelter A Bad Thing?

Discussion in 'Economy' started by AVG-JOE, Sep 29, 2008.

  1. AVG-JOE
    Offline

    AVG-JOE American Mutt Staff Member Gold Supporting Member

    Joined:
    Mar 23, 2008
    Messages:
    22,887
    Thanks Received:
    4,879
    Trophy Points:
    260
    Location:
    Your Imagination
    Ratings:
    +7,014
    If gasoline and heating oil fell by 15% everyone would be :beer: and doing a happy :eusa_dance:!

    Why is cheaper shelter such a bad thing?

    -Joe
     
  2. Care4all
    Offline

    Care4all Warrior Princess Supporting Member

    Joined:
    Mar 24, 2007
    Messages:
    32,676
    Thanks Received:
    6,600
    Trophy Points:
    1,170
    Location:
    Maine
    Ratings:
    +11,023
    those that own homes and in good standing, are losing their wealth....their homes are now worth less and less every day... and none of this was their fault.... many are now in upside down mortgages, owing more than their homes are now worth...this keeps them in the home because they can't sell it for a loss, because they owe the banks the larger amount...this makes them immobile....impossible for them to move somewhere for a better job...strapped.

    many of those people that need cheaper shelter have just had their lives ruined, bankrupt, and no credit rating worth a rental or a job because of their foreclosures....and employers can now check credit ratings when hiring....so goodbye for any chance of improving ones life...

    those are a few things that i could think of....
     
  3. Bern80
    Offline

    Bern80 Gold Member

    Joined:
    Jan 9, 2004
    Messages:
    8,094
    Thanks Received:
    720
    Trophy Points:
    138
    Ratings:
    +726
    It's kimda of a six to one, half dozen the other deal. There is always, always, always (I repeat) always money to be made in real estate. Now is no different. If times are 'bad' for sellers it means it's 'good' for buyers. You just have to know when to do both of those things. And anyone who though their home value was just going to rise to infinity is an idiot. Fault or not it simply wasn't a reasonable expectation. Most expert knew were on a bubble long before it burst. Ignorance is no excuse.
     
    • Thank You! Thank You! x 1
  4. AVG-JOE
    Offline

    AVG-JOE American Mutt Staff Member Gold Supporting Member

    Joined:
    Mar 23, 2008
    Messages:
    22,887
    Thanks Received:
    4,879
    Trophy Points:
    260
    Location:
    Your Imagination
    Ratings:
    +7,014
    Falling real estate prices are the same as falling stock prices - it is only a loss if you have to sell. If you are in the home you plan on staying in for a while, or you're in a home you can at least stand for the time being, you have lost nothing... even if on paper the value is less.

    There is good news there also... a lower property value = lower property taxes.

    I know that there are a lot of cases across the nation of people that have to sell and take the loss, and I know that upside-down means no refinance, but if we lined up every home owner who would trade in their mortgage for an 8% fixed for 30 years mortgage, would we come close to 700 million, let alone 10 times that much?

    -Joe
     
    • Thank You! Thank You! x 1
    Last edited: Sep 29, 2008
  5. CA95380
    Offline

    CA95380 USMB Member

    Joined:
    Jul 23, 2008
    Messages:
    2,779
    Thanks Received:
    186
    Trophy Points:
    48
    Location:
    Central California
    Ratings:
    +186
    I don't think the price of "shelter" is going to change much in the near future ... but today I paid $3.37 a gallon for gas (the cheapest in months and months) .... then came home and watched people (on television) waiting in line for hours in "The Carolina's" to even get to a gas station. :eusa_shifty: Something is seriously "flucked" up :cuckoo:
     
  6. AVG-JOE
    Offline

    AVG-JOE American Mutt Staff Member Gold Supporting Member

    Joined:
    Mar 23, 2008
    Messages:
    22,887
    Thanks Received:
    4,879
    Trophy Points:
    260
    Location:
    Your Imagination
    Ratings:
    +7,014
    Prices will stabilize... people gotta eat - we just need to re arrange our spending priorities - Wal Mart may not sell quite as much cheap Chinese crap this year, but Christmas is going to come.

    We need to address the problems by changing the way congress relates to the market place and decide what, exactly we want from our government, but first we need to put the big decisions into the hands of the next administration, be it McCain or Obama. A lame-ass-duck with a credit card is a dangerous thing.

    -Joe
     
    • Thank You! Thank You! x 1
  7. CA95380
    Offline

    CA95380 USMB Member

    Joined:
    Jul 23, 2008
    Messages:
    2,779
    Thanks Received:
    186
    Trophy Points:
    48
    Location:
    Central California
    Ratings:
    +186
    I agree totally!
     
  8. WillowTree
    Offline

    WillowTree Diamond Member

    Joined:
    Sep 15, 2008
    Messages:
    68,097
    Thanks Received:
    10,151
    Trophy Points:
    2,030
    Ratings:
    +14,637



    stop being logical willya? It freaks em out! :D
     
  9. Zoomie1980
    Offline

    Zoomie1980 Senior Member

    Joined:
    Jan 16, 2008
    Messages:
    1,658
    Thanks Received:
    128
    Trophy Points:
    48
    Ratings:
    +128
    Then that "wealth" is artificial. I never was there to begin with. An old adage in the real estate business is when ask how much is my house worth? well, it is worth what someone is willing to pay for it.....

    You cannot ARTIFICIALLY set prices of ANYTHING. If speculation runs it up ridiculously, then that same speculation WILL run it DOWN just as ridiculously. That's how markets work. And that is a GOOD thing
     
  10. AVG-JOE
    Offline

    AVG-JOE American Mutt Staff Member Gold Supporting Member

    Joined:
    Mar 23, 2008
    Messages:
    22,887
    Thanks Received:
    4,879
    Trophy Points:
    260
    Location:
    Your Imagination
    Ratings:
    +7,014
    The job of the government is to try to keep those speculative adjustments out of the swings in price through rules. At least that's what my 5th grade history teacher told me. There is nothing wrong with rules... we wouldn't want people to be able to kill to get ahead in the market any more than we would we want government to mandate what an entrepreneur pays himself or his employees, and I can testify that I have never been mistreated by a company owner I worked with on a daily basis.

    I think we all could agree that some rules are necessary... now we just need to be heard over the di$tracting din of the corporate lap-dog lobbyists in the halls of congress to work out the details.

    -Joe
     

Share This Page