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Old 02-04-2009, 09:56 AM
 
1,551 posts, read 4,299,132 times
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Quote:
Originally Posted by JamesBoyer View Post
if homes were to drop to that level based on what I assume you mean by that level, it will no longer meet your definition anymore, and prices would have to fall further, since your average hard working responsible citizen would then be out of a job since the economy would have tanked so badly by then that we would truly be in a depression. But you don't agree with that, because you have your mind stuck on some statistic.
Right. Because inflated bubblicious housing prices are the solution to the a depression, instead of a cause. That seems to be your idea.
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Old 02-04-2009, 10:01 AM
 
2,312 posts, read 6,956,995 times
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Well, money was cheap, of course housing prices went up!

When we bought our first apartment in the mid 90s I think our interest rate was freaking 11 percent or something rapacious like that!

Now we're going to say lenders were wise to charge that much interest? Even the bible says usury is a sin.
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Old 02-04-2009, 10:27 AM
 
596 posts, read 898,872 times
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Quote:
Originally Posted by sholden View Post
So you are saying that the in the late 1990s, when home prices were at exactly that level, that the average hard working responsible citizen was out of a job and we were in a depression?

Oh what, we weren't? It was an economic boom at that time? But house prices weren't sky high, how can that be?

House prices are not the be all and end all of the economy. That they currently are acting as if they are is just more evidence that we are still in the midst of the collapse of an unprecedented housing bubble.
housing prices are the be all end all when all your economy was based on consumption via people borrowing against their houses. It was a phony economy and it needs to unravel, not be stimulated.
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Old 02-04-2009, 10:41 AM
 
Location: NJ
12,284 posts, read 33,133,766 times
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Quote:
Originally Posted by clevedark View Post
Well, money was cheap, of course housing prices went up!

When we bought our first apartment in the mid 90s I think our interest rate was freaking 11 percent or something rapacious like that!

Now we're going to say lenders were wise to charge that much interest? Even the bible says usury is a sin.

no way were interest rates that high in the mid 90's, unless you were high risk. in 92 my rate was 8%, refi'ed in 94 to about high 6's, bought in 97 i'd say mid 7's.

are you talking about the 80's?
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Old 02-04-2009, 10:59 AM
 
Location: The Beautiful Pocono Mountains
5,450 posts, read 8,035,166 times
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Quote:
Originally Posted by halfoffpeak View Post
Dow in February 1998 was 8500 which is higher than today. Also, economy (finance and tech) was strong, there was some middle class , there was no war.

If you put things in perspective, half off peak is a great deal.
Sorry, but no, it's not...

I guess that those of us that bought back then should just lose out and still have to pay on these houses when all we want to do is get a bigger one to accomodate our larger families. Never mind all the money we threw at our mortgage companies over all these years. Basically, screw us??? Is that your mentality???

I thought prices were doubled every 10 years?? Is this wrong too??
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Old 02-04-2009, 11:03 AM
 
71 posts, read 255,941 times
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Quote:
Originally Posted by halfoffpeak View Post
Well, the graph I presented IS the Case Shiller index adjusted for inflation as you asked. It also accounts for prices since 1890 as you asked. It is also saying what I am saying. How am I hiding? I put up a graph and willing to argue and discuss. You call this hiding?
I didn't ask for either - I just questioned the conclusion you drew from the statistics, like on Page 2, where you wrote:

Quote:
Originally Posted by halfoffpeak View Post
S&P | Indices > Alternative Indices - S&P/Case-Shiller® Home Price Indices - Home Price Values

The current November 08 number for NY area is ~185 down from ~215 at peak. Average is 100. Bidding half off does not guarantee a good price merely average-won't loose in the long term.
The data you're referring to, which seemingly justifies your "half off peak" philosophy, is not inflation-adjusted. And, as we already discussed, your assertion that 100 is an average is wrong.

And, on top of that, your 30 year period to which you believe current home prices should be equal, is an arbitrary period based strictly on the amount of data you found.

The graph you presented does not demonstrate what you had been telling people previously. Unfortunately, the only clear data points are for 1890 and 2005, but it is clear on the graph that the pre-bubble level was above 100, and the peak was at 185. It doesn't support your assertion that peak prices were twice as much as they should have been.

Quote:
Originally Posted by halfoffpeak View Post
As for the negotiations, they may not go anywhere right now but they will go if one is willing to wait. Houses are rarely unique. If a seller does not budge move to the one with a comparable house who does. Buying a house does not have to be an emotional choice as you suggest.
Have you ever heard Robert Shiller speak? He has made the point that even 50 years ago, the concept of housing as an investment would've been foreign to the vast majority of homeowners. Clearly, that mentality has changed, and trying to tie current or future prices to levels set in 1890, inflation-adjusted or not, seems like a faulty premise in that context.

Keep in mind, I'm not even questioning your conclusions right now. I'm questioning your reasoning for drawing those conclusions.
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Old 02-04-2009, 11:07 AM
 
1,551 posts, read 4,299,132 times
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Quote:
Originally Posted by Jerseyt719 View Post
Sorry, but no, it's not...

I guess that those of us that bought back then should just lose out and still have to pay on these houses when all we want to do is get a bigger one to accomodate our larger families. Never mind all the money we threw at our mortgage companies over all these years. Basically, screw us??? Is that your mentality???

I thought prices were doubled every 10 years?? Is this wrong too??
LOL please tell me your post is a joke.
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Old 02-04-2009, 11:13 AM
 
596 posts, read 898,872 times
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Quote:
Originally Posted by Jerseyt719 View Post
Sorry, but no, it's not...

I guess that those of us that bought back then should just lose out and still have to pay on these houses when all we want to do is get a bigger one to accomodate our larger families. Never mind all the money we threw at our mortgage companies over all these years. Basically, screw us??? Is that your mentality???

I thought prices were doubled every 10 years?? Is this wrong too??
Umm, I'm not sure what this post was saying since it was poorly worded. But are you implying that you have a right to appreciation? Basically *********? No, that's not our mentality. On the flip side, yours seems to be just that towards home buyers today. You thought prices doubled every 10 years. You were wrong.

Lower home prices are a good thing for America for the long term health of the economy. The only people lower home prices aren't good for are the ones that overextended yourself. Lower home prices make housing affordable. Hell, you should be so fortunate. You may be able to actually buy a vacation home for cheap!

Lower home prices are good for America for the same reason that lower oil prices are. People fail to make the distinction when they have skin in the game. I bought a bunch of petroleum stocks last month because I think the price of oil will rise from here in the future. Do I want them to rise? No not really. I recognize that it's not good for America, despite the fact that it would be good for my account.
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Old 02-04-2009, 11:16 AM
 
71 posts, read 255,941 times
Reputation: 37
Quote:
Originally Posted by elflord1973 View Post
No-one likes a pessimist, but they are an important part of the pricing system. It is bad enough that it is impossible to "short" housing, which is an obstacle to prices correcting.
Ahh, but it's not impossible to short housing! Housing futures are traded on the Merc. And, at least for now, there are still plenty of publicly-traded stocks (homebuilders, for example) that are tied to the housing industry.

To be sure, certain people can profit from home prices plummeting just as easily as others can from prices escalating.
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Old 02-04-2009, 11:22 AM
 
Location: New Jersey
2,083 posts, read 4,543,542 times
Reputation: 1540
Quote:
Originally Posted by Jerseyt719 View Post
I thought prices were doubled every 10 years?? Is this wrong too??
theoritically, home values should increase about 3-4% in addition to inflation. lets look at the data -

year avg inflation
2008 3.85
2007 2.85
2006 3.24
2005 3.39
2004 2.68
2003 2.27
2002 1.59
2001 2.83

if we take year 2000 as base, a home worth 100k should be worth 158k after inflation & the 3% appreciation. now, show me one county in US where prices have increased by only 58% in last 8 years.
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