Comments on: Three Notes on Housing http://alephblog.com/2008/01/23/three-notes-on-housing/ Helping Institutions and Ordinary People Invest Better by Focusing on Risk Control Fri, 25 May 2012 17:02:54 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Bob Meyerhttp://alephblog.com/2008/01/23/three-notes-on-housing/comment-page-1/#comment-16616 Bob Meyer Thu, 24 Jan 2008 01:23:49 +0000 http://alephblog.com/2008/01/23/three-notes-on-housing/#comment-16616 Coupled with the demographics is the reality that homes (prices) will not be growing at 5%-10% annually. No longer seen as an investment, but more of an expense, will further dampen speculation. A new, more sober era for housing is on the horizon...and that is good for our country's overall economic health and vitality. Coupled with the demographics is the reality that homes (prices) will not be growing at 5%-10% annually. No longer seen as an investment, but more of an expense, will further dampen speculation. A new, more sober era for housing is on the horizon…and that is good for our country’s overall economic health and vitality.

]]> By: larsterhttp://alephblog.com/2008/01/23/three-notes-on-housing/comment-page-1/#comment-16615 larster Thu, 24 Jan 2008 01:07:58 +0000 http://alephblog.com/2008/01/23/three-notes-on-housing/#comment-16615 The reason for the 25-30% forecast (which I concur with) is the combo of lost jobs, no savings, negative equity, and supply/demand imbalance for homes. You add all these into the mix and you ge a huge decline in value, plus an added kicker. The added kicker is some kind of bailout as mentioned by Kass, dodd, etc today. We will end up with some sort of bailout which will tell all those that havbe saved some money and play by the rules the they are the screwee. the only option will be to walk away and start over and play the game. If you bought a $600,000 house in CA with 20% down, you are looking at a $480,000 house, for example that has $120,000 of your money. You're paying interest on monies that do not exist today. I think a number of these people will take the jingel mail alternative as the banks will probably not go after them. The reason for the 25-30% forecast (which I concur with) is the combo of lost jobs, no savings, negative equity, and supply/demand imbalance for homes. You add all these into the mix and you ge a huge decline in value, plus an added kicker. The added kicker is some kind of bailout as mentioned by Kass, dodd, etc today. We will end up with some sort of bailout which will tell all those that havbe saved some money and play by the rules the they are the screwee. the only option will be to walk away and start over and play the game. If you bought a $600,000 house in CA with 20% down, you are looking at a $480,000 house, for example that has $120,000 of your money. You’re paying interest on monies that do not exist today. I think a number of these people will take the jingel mail alternative as the banks will probably not go after them.

]]> By: Billhttp://alephblog.com/2008/01/23/three-notes-on-housing/comment-page-1/#comment-16614 Bill Thu, 24 Jan 2008 00:23:52 +0000 http://alephblog.com/2008/01/23/three-notes-on-housing/#comment-16614 I saw that graph too in the last day or two. OUCH is what went through my mind. It might be rational for people to default in order to cut their losses but if hanging on is a possibility it seems more ethical to me. When the depression hit my great grandfather refused to withdraw his carefully set aside savings. He said basically that if everyone did it, the economy would crash. He lost his savings of course. I am not that extreme. I saw that graph too in the last day or two. OUCH is what went through my mind.

It might be rational for people to default in order to cut their losses but if hanging on is a possibility it seems more ethical to me.

When the depression hit my great grandfather refused to withdraw his carefully set aside savings. He said basically that if everyone did it, the economy would crash. He lost his savings of course. I am not that extreme.

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