On 11/15/2008 11:55:20 AM, John Williams ([EMAIL PROTECTED]) wrote: > Did you make any posts predicting the housing crisis before, say, > 2004?
I don't recall having posted about this onlist, but it has been on my mind for a few years as being a serious problem w/consequences. What got me thinking about it in the first place was news about housing prices in California and New York City. I found it astounding that home prices in those places could be at such variance with what I saw in the local market. I understood the demand arguments, but didn't find them too convincing. Then, I discussed the situation with people who had moved here from California. They were selling Cal. homes and moving here into homes well beyond their means (and then bitching about property taxes). Frex: One guys dad had bought a Cal. home for 70K back in the 70's and sold it in 2003 for over 1.5M. To me, that was a sign of an unsupportable bubble, and led me into further thinking about the local market. The home I grew up in cost my parents 11K in 1958. In 1977 my Mom sold it for 33K even though the neighborhood was already in a downward slide (becoming a poor persons neighborhood). Now I would guess you couldn't touch the house for less than 60K(I just looked up some homes in the 'hood and its more like 85K) even though it is basically a slum. This tells me that there is something seriously wrong with the housing market. And the market here is quite favorable compared to many other areas of the country. (I think Dan could speak about this with more authority off the top of his head.) My current thinking is that the whole real estate market is basically a pyramid scam where "players" make profit in the long term off of "boom and bust" cycles, and in the short term off of speculation. (I'm not positing grand conspiracies, just greed greed greeeeeeeeed>) I'm not much of a proponent for regulation in this case, but I don't see any market forces that are strong enough to offset or even oppose the greed function. At the least, for decades we have been hammered with the idea that real estate prices will *always* increase. But why should they when the intrinsic value of a property has decreased? Now the bubble has burst, and in some places prices are decreasing. But it isn't because the homes are deteriorating, or gangs infest the local parks, or the schools are failing, or city services have been diminished, it is because the credit market is suffering. And that tells me the entire system is broken. (Note: Locally, home prices are holding steady or increasing. Correct me if I am wrong here) xponent Intentional Non-Homeowner Maru rob _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
