Original Message:
From: David Hobby hob...@newpaltz.edu
Date: Mon, 23 Feb 2009 00:08:53 -0500
To: brin-l@mccmedia.com
Subject: Re: On the Housing Market

Rceeberger wrote:
> Housing prices may still have a ways to fall.


>Wow.  That's certainly what the chart shows.

>Is it really that clear?  If it were, you'd
>think that enough investors would have bet
>against the housing bubble that it never
>would have happened.

The bubble was that clear, particularly where housing prices skyrocketed up
on the coasts, in NV, etc. There is no way that a doubling in price is
anything but a bubble. But, the house I sold, I had to put in about $10k of
upgrades and sold at about 10k over what I bought (in inflation ajdusted
dollars), so the bubble isn't everywhere.  But, we're now starting to drop
in value as the market dries up.

Houses are now much bigger than they were in the '50s, GDP per capita is
much higher, etc.  So, a rise in inflation adjusted home prices is not
inherently inappropriate: one would not expect to pay the same price for a
3000 sq. ft. house as for a 1500 sq. ft. house, especially if the 3000 sq.
ft. house is much nicer. The rent vs. own question is still important. 
Right now, we're living in a 1350 sq. ft. apartment that costs more than
our mortgage payments were on our 3000 sq. ft. house.  Working it all out,
if it wasn't for the value of getting our appreciation while we did and the
relative ease of leaving an apartment when Teri got called, it would have
been cheaper to stay in the big house, maintaince costs and all.

Dan M. 

So, home prices could now be 10% overvalued.  

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