Spring Market? What Spring Market? (Hasbrouck Heights: foreclosure, lender, house)

[lastinshow]

Originally Posted by Marc Paolella

They never were. They never are.

Housing has never been affordable. Not even in the 1950's in the Golden Age when your father worked part time for the newspaper and raised a family in a nice 3 BR home with chocolate chip cookies and apple pie. It's all a myth.

Housing will never be affordable. Owning nice real estate will always cost talent and hard work. There is no right to it. It is a privilege reserved for those who make it a goal and force it to happen.

And that is how it should be.

I think the poster was alluding to levels of affordability that would ensure enough market entrants to maintain supply and demand and keep the market moving. Not some ephemeral "right" to a house.
If only 10% of households can afford to buy a home (without funny money) the housing market is a dead duck. You would anticipate affordability to mean essentially people able to buy real estate commensurate with their financial status with the wealthy buying the best and so on down.

[halfoffpeak]

Originally Posted by NatasNJ

Is there something wrong with that? Am I not allowed to point out the stupidity of some sellers in the market today and how out of touch with reality they are?

No you are not allowed. You should pay what the seller asks. If the seller made improvements, you should pay for them, even if you can find houses with similar improvements for less. If you cannot pay the seller price, you are not worth of that house. Owning a house is a privilege for only but the chosen ones, and should remain this way

[Lusitan]

Originally Posted by Marc Paolella

They never were. They never are.

Housing has never been affordable. Not even in the 1950's in the Golden Age when your father worked part time for the newspaper and raised a family in a nice 3 BR home with chocolate chip cookies and apple pie. It's all a myth.

Housing will never be affordable. Owning nice real estate will always cost talent and hard work. There is no right to it. It is a privilege reserved for those who make it a goal and force it to happen.

And that is how it should be.

Sorry Marc, but there is historic data showing the relationship between median household income and median home prices, and that data leads to an undeniable fact: median home prices (especially in NJ) are far higher than the historic ratio to median income. So contrary to your statement, in the 1950s home owership was indeed more affordable than it is today.

Chocolate chip cookies and applie pie aside, here's a chart showing exactly what I'm talking about (this chart doesn't even go back to the 1950s, but we'll have to settle for 1960s):



I don't disagree that housing will never be affordable to everyone (in fact, that notion is part of what got us into this bubble in the first place, the idea that everyone should be given enough rope to hang themselves with buying overpriced real estate). And I don't disagree that owning a house is a privilege, not a right, that takes hard work to obtain.

That said, you seem to equate "historic rates of affordability" with "a house for everyone" which is not at all what I'm saying. I'm saying that houses will return to the average level of affordability that they've always been at (i.e. somewhere around 3x of annual household income).

It will still require hard work, it just won't require crushing amounts of debt on a house that's overpriced and sinking in value. And writ large, normal home ownership at normal prices won't require driving this country's finances into the ground.

[lastinshow]

Originally Posted by halfoffpeak

No you are not allowed. You should pay what the seller asks. If the seller made improvements, you should pay for them, even if you can find houses with similar improvements for less. If you cannot pay the seller price, you are not worth of that house. Owning a house is a privilege for only but the chosen ones, and should remain this way

A gold star for humor, reps to you.

[Marc Paolella]

Originally Posted by Lusitan

Sorry Marc, but there is historic data showing the relationship between median household income and median home prices, and that data leads to an undeniable fact: median home prices (especially in NJ) are far higher than the historic ratio to median income. So contrary to your statement, in the 1950s home owership was indeed more affordable than it is today.

This kind of historic data is not meaningful. It isolates 2 statistics and ignores a hundred others, like energy prices, rates of inflation, market psychology, unemployment rates, mortgage rates, property taxation, etc.

I am saying it was just as hard to buy a home in the 1950's, 1920's, 1840's and 1700's as it is today.

People complained about it then, they complain about it today, they will complain about it forever. It's just the nature of the commodity.

Dividing house prices by median income is simply not a meaningful statistic. It is certainly not predicitive of anything. If it were, 2005 would not have happened.

[xmonger]

Originally Posted by Marc Paolella

Dividing house prices by median income is simply not a meaningful statistic. It is certainly not predicitive of anything. If it were, 2005 would not have happened.

Strongly disagree.

If lending standards had held, the boom to bust scenario would have never happened.

Income to house values is meaningful. That is why house prices will continue to crater.

[NatasNJ]

Originally Posted by Marc Paolella

This kind of historic data is not meaningful. It isolates 2 statistics and ignores a hundred others, like energy prices, rates of inflation, market psychology, unemployment rates, mortgage rates, property taxation, etc.

I am saying it was just as hard to buy a home in the 1950's, 1920's, 1840's and 1700's as it is today.

People complained about it then, they complain about it today, they will complain about it forever. It's just the nature of the commodity.

Dividing house prices by median income is simply not a meaningful statistic. It is certainly not predicitive of anything. If it were, 2005 would not have happened.

All your other statistics occured at various levels over the chart displayed and yet the prices STILL historically mainted a close to 3x income level. Just because the chart doesn't show 'market psychology' in a line it still occured and the prices still hovered above and below the same income level until recently.

[Lusitan]

Originally Posted by Marc Paolella

This kind of historic data is not meaningful. It isolates 2 statistics and ignores a hundred others, like energy prices, rates of inflation, market psychology, unemployment rates, mortgage rates, property taxation, etc.

Isolating and comparing median home price to median household income is entirely meaningful -- just about the most meaningful statistic you can use. And isolating the two variables you're focusing on (housing prices and incomes) is exactly what you're supposed to do when trying to analyze this question. (hint: this is why you'll find this statistic in almost any serious analysis of the housing bubble)

For the record, inflation does not affect the calculation, since the chart compares 1965 housing dollars to 1965 income dollars, and 2009 housing dollars to 2009 income dollars. Inflation is inherently dealt with in the chart.

As to all the other stuff you mention, adding those factors in would in fact only make the case stronger that home prices are still overpriced. In fact, the unemployment rate and sky-high property taxes are even more reason why home values (and total cost of home ownership) are still way overpriced in NJ. And as for "market psychology", don't even get me started. Not since the Great Depression have we faced such a disastrous financial outlook.

I am saying it was just as hard to buy a home in the 1950's, 1920's, 1840's and 1700's as it is today.

Well, you're wrong, for the reasons described above and the data I already showed you. In terms of percentage of household income spent on housing, it was easier to buy a home in 1965 (and for the past 100 years, I don't think going back to colonial times before the U.S. even existed is meaningful) than it is today.

People complained about it then, they complain about it today, they will complain about it forever. It's just the nature of the commodity.

Um, OK.

Dividing house prices by median income is simply not a meaningful statistic. It is certainly not predicitive of anything. If it were, 2005 would not have happened.

Right. I guess one should just let NAR and the realtors tell us when it's a good time to buy, eh? Wait, I know the answer -- "always"!

2005 happened precisely because of a corrupt system that enabled the greed and stupidity of the masses to run wild over longstanding financial guidelines that we had always operated under. 2005 was an aberration (hint: it's why everyone's talking about the Second Great Depression) not a normal occurence.

Without the insane lending practices of 2005, we would not have had the bubble or the mess we have today. And 2005 should have never been allowed to happen. But the fact that it did is just proof that the entire ponzi scheme will continue to collapse now that things are getting back to normal.

[Marc Paolella]

Originally Posted by Lusitan

Isolating and comparing median home price to median household income is entirely meaningful -- just about the most meaningful statistic you can use. And isolating the two variables you're focusing on (housing prices and incomes) is exactly what you're supposed to do when trying to analyze this question. (hint: this is why you'll find this statistic in almost any serious analysis of the housing bubble)

For the record, inflation does not affect the calculation, since the chart compares 1965 housing dollars to 1965 income dollars, and 2009 housing dollars to 2009 income dollars. Inflation is inherently dealt with in the chart.

As to all the other stuff you mention, adding those factors in would in fact only make the case stronger that home prices are still overpriced. In fact, the unemployment rate and sky-high property taxes are even more reason why home values (and total cost of home ownership) are still way overpriced in NJ. And as for "market psychology", don't even get me started. Not since the Great Depression have we faced such a disastrous financial outlook.



Well, you're wrong, for the reasons described above and the data I already showed you. In terms of percentage of household income spent on housing, it was easier to buy a home in 1965 (and for the past 100 years, I don't think going back to colonial times before the U.S. even existed is meaningful) than it is today.



Um, OK.



Right. I guess one should just let NAR and the realtors tell us when it's a good time to buy, eh? Wait, I know the answer -- "always"!

2005 happened precisely because of a corrupt system that enabled the greed and stupidity of the masses to run wild over longstanding financial guidelines that we had always operated under. 2005 was an aberration (hint: it's why everyone's talking about the Second Great Depression) not a normal occurence.

Without the insane lending practices of 2005, we would not have had the bubble or the mess we have today. And 2005 should have never been allowed to happen. But the fact that it did is just proof that the entire ponzi scheme will continue to collapse now that things are getting back to normal.

Your arguments are largely hyperbole and non-sequitirs. First there is your agenda, basically that the sky is falling. Then there are whatever statistics you can pull to support your agenda. That's fine. Most economic analysis is meaningless and driven by the desire to push an agenda.

I am here to say that your statistics and your analysis are meaningless.

Is it a good time to buy? Of course! If you need a house. It's always a good time to buy whatever you need: a camera, a boat, a house, or cat food. Provided you have enough money and you have a need, it is a GREAT time to buy!

As humans we are here for an eye-blink. Tho ignore the pleasures of homeownership because values might drop is stupid.

Let's not forget that during the years good times of the housing bubble, we all enjoyed the good times! I certainly did. And I still am. There is not a day that goes by when I don't look at my stupid house and LOVE the fact that I live in a country where I can enjoy such a marvelous thing as homewonership. 2005 was great! Let's do it again. We can and we will.

GOOD TIMES COUNT FOR SOMETHING in the abbreviated span of a human lifetime. When they happen, we should enjoy them, not pontificate on the necessity to prepare for Armageddon.

Capitalism is boom and bust, as is life. When there is a boom, enjoy it! When there is a bust, let's build the next boom!

[halfoffpeak]

Originally Posted by Marc Paolella

First there is your agenda, basically that the sky is falling. Then there are whatever statistics you can pull to support your agenda. That's fine. Most economic analysis is meaningless and driven by the desire to push an agenda.

What agenda? As if his profession depends on house selling

Originally Posted by Marc Paolella

I am here to say that your statistics and your analysis are meaningless.

Great argument.

Originally Posted by Marc Paolella

Capitalism is boom and bust, as is life. When there is a boom, enjoy it! When there is a bust, let's build the next boom!

People are fed up with boom and bust. You can't strip people of their retirement and say "that's life". This version of capitalism, a giant Ponzi scheme, is more appropriate for those who are out for a quick buck. There should be oversight and regulation.