Why Are Falling Prices For Shelter A Bad Thing?

[AVG-JOE]

If gasoline and heating oil fell by 15% everyone would be and doing a happy !

Why is cheaper shelter such a bad thing?

-Joe

 

[Care4all]

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....

 

[Bern80]

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.

 

[AVG-JOE]

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

 

[CA95380]

If gasoline and heating oil fell by 15% everyone would be and doing a happy !

Why is cheaper shelter such a bad thing?

-Joe

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. Something is seriously "flucked" up

 

[AVG-JOE]

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. Something is seriously "flucked" up

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

 

[CA95380]

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

I agree totally!

 

[WillowTree]

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

stop being logical willya? It freaks em out!

 

[Zoomie1980]

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....

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

 

[AVG-JOE]

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

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

 

[Zoomie1980]

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

Basically you put tight limits are daily market moves...at least in exchanges. that gives people a change to "sleep on it". In Cotton for instance, the limit is 200 points ($2 a bale). If specs really feal Cotton is $20 to high, they have to hit limit down for 10 days in a row to get there! Those markets are seldom limit down more than two days.

But they may very well fall 2000, 3000, 4000 points because it is LEGITIMATE.

I feel housing fall is LEGITIMATE because the run up in prices were OBSCENE. A 1200sq ft house on a 1/6th acre in San Jose in 1980 sold for $80,000 in 2006 it sold for $2,200,000!!!!! That is INSANITY. And that is why we are in the shape we are in.

So how do you "regulate" run ups in housing prices like that?

 

[AVG-JOE]

Basically you put tight limits are daily market moves...at least in exchanges. that gives people a change to "sleep on it". In Cotton for instance, the limit is 200 points ($2 a bale). If specs really feal Cotton is $20 to high, they have to hit limit down for 10 days in a row to get there! Those markets are seldom limit down more than two days.

But they may very well fall 2000, 3000, 4000 points because it is LEGITIMATE.

I feel housing fall is LEGITIMATE because the run up in prices were OBSCENE. A 1200sq ft house on a 1/6th acre in San Jose in 1980 sold for $80,000 in 2006 it sold for $2,200,000!!!!! That is INSANITY. And that is why we are in the shape we are in.

So how do you "regulate" run ups in housing prices like that?

Todays economy proves that no expertise exists that can smoothly regulate prices and drive the economy in a particular direction, at least in theory... If congress controlled the money supply instead of the quasi-for profit Federal Reserve and the availability of credit was based on an interest rate set by congress for all citizens, the current value of an asset and the loan to value ratio instead of arbitrary rules designed to drive the economy in this or that direction, we would see steady growth instead of the current roller-coaster ride we enjoy today.

Economic roller-coaster rides are all fun and games until weaker riders start puking.

-Joe

 

[Diuretic]

If gasoline and heating oil fell by 15% everyone would be and doing a happy !

Why is cheaper shelter such a bad thing?

-Joe

Damn good question. In fact it's such a good question I'm gong to repeat myself.

Damn good question!

 

[manifold]

If gasoline and heating oil fell by 15% everyone would be and doing a happy !

Why is cheaper shelter such a bad thing?

-Joe

From a big picture standpoint, it's not. But there are many casualties in the wake of the "adjustment." How much we care about these casualties is the real question. In a way it's similar to various forms of human progress. Overall good, but what about the 55yr old factory worker who's all of a sudden totally fucked?

My home is now worth about 20% less than it's highest point, but luckily for me, that's still about 20% more than what I paid. In the words of the poetic REO Speedwagon. Riding the Storm Out...

 

[gonegolfin]

If gasoline and heating oil fell by 15% everyone would be and doing a happy !

Why is cheaper shelter such a bad thing?

-Joe

It is not whether cheaper or more expensive shelter is a bad thing. It is about allowing housing (shelter) to be allowed to find its true price, not be propped up artificially by government (once again). This is more of the same "medicine" that caused the problems we are now facing. This is price fixing. Housing must be allowed to correct on its own.

Brian

 

[AVG-JOE]

From a big picture standpoint, it's not. But there are many casualties in the wake of the "adjustment." How much we care about these casualties is the real question. In a way it's similar to various forms of human progress. Overall good, but what about the 55yr old factory worker who's all of a sudden totally fucked?

My home is now worth about 20% less than it's highest point, but luckily for me, that's still about 20% more than what I paid. In the words of the poetic REO Speedwagon. Riding the Storm Out...

I have to ask... How many 55 year old factory workers find themselves totally fucked? I don't see a lot of 55 year old factory workers getting into a new house in the last 10 years - especially without having some equity pushed forward from the house they raised their kids in. How many are truly upside down right now? How many of those can not afford to hang in for a few years until things are un-fucked?

I think more people, at least your average working stiff, are in a position more like you, Manifold... Ridin' the storm out...

-Joe

 

[editec]

If gasoline and heating oil fell by 15% everyone would be and doing a happy !

Why is cheaper shelter such a bad thing?

-Joe

Because people's homes have traditionally been the major investment of the middle class.

Most of us worked our asses off to get into our homes to begin with, and we all hoped that if we suffered to keep them, we could leave them to our children such that they didn't have to work so damned hard paying off some parsitic banker for their entire lives to own a home like we did to own ours.

Aside from that, no problems at all, eh?

 

[manifold]

I have to ask... How many 55 year old factory workers find themselves totally fucked? I don't see a lot of 55 year old factory workers getting into a new house in the last 10 years - especially without having some equity pushed forward from the house they raised their kids in. How many are truly upside down right now? How many of those can not afford to hang in for a few years until things are un-fucked?

I think more people, at least your average working stiff, are in a position more like you, Manifold... Ridin' the storm out...

-Joe

*shakes head*

At least you got part of what I meant.