Is this the new normal? Well we ever see economic growth again like we had under Bush? (Barack Obama, millionaires)
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Singapore is a city state tax haven with very little in the way of military and a huge amount of foreign source income. Using Singapore as an example for US tax policy is akin to using San Marino as a model for showing how US military spending is out of control.
I realize that but my point still stands that you do not need high tax rates in order to thrive. Obviously, you have to pay your bills and generate enough to pay them.
I realize that but my point still stands that you do not need high tax rates in order to thrive. Obviously, you have to pay your bills and generate enough to pay them.
Of course not. But it appears developed nations do need higher taxes than their "non-developed" peers. And yes Singapore has about ~6.1 million people, a city-state and is not a fair comparison.
For example, the Houston-Baytown-Huntsville metro area has ~6.2 million people and a GDP of ~$420 billion.
Compare to Singapore, population 6.1 million and a GDP of ~328 billion.
Houston has a higher income and GDP and it's the USA.
Geeze if you used the politics and controversies section of CD has a guide to the state of this country then you'd think we were completely in the pooper.....
Do we? You excluded labor cost, which aren't static. Prices for materials and energy goes up down. And you aren't factoring in the price land. Land is worth next to a lake compared to a barren field. Not to mention, land has the issues of supply and demand. Land in inner city Detroit isn't in demand like it was at the height of the American auto industry.
Then you can add in all the financial and legislative gimmicks and tomfoolery.
edit: I also forgot to mention school systems, crime rates, proximity to employment centers, etc. all influence the price of a house too.
Labor cost is the biggest bamboozle in this issue. Tell me, how much did it cost the developer to build a home that cost him a 100k when he turned around and sold that home for 300k?
You see, natural pricing while relevant to the bottom line is not considered when we look at the market and buyer stupidity. Seriously, I have seen a developer and his costs be according to a 120k homes after being built, turn around and adjust that cost by 100% or more. So please don't tell me about land costs, etc... I understand such adjustment. As I said in my mention, I watched a development increase in price by a 100% when there was a buyer frenzy of extremely stupid people. By the way, they weren't buying lake front property, they were buying rocky poor soil property only because idiots from the city thought it was an amazing buy compared to their stupidly million dollar shacks they were selling near the city.
We know what the natural price of a home should be based on the actual cost of products and the like. Fact is, if you look closely at the costs of building a home (ie remove the cost of labor), you will see they are nowhere near what it costs to purchase a finished product. My grandfather was a contractor for 50 years. He built everything from moderate sized business buildings to average homes, even "top dollar" eccentric homes for the wealthy.
His profit margins were much different than they are today. His profit on a home that was around 50k was roughly 10 percent. These days, builders are pulling in as high as 100% profit on a home. Just before the "craze" started in CA in my area, a newly built stretch of homes were listed at around 150k. Within a month, they were jumped to over 300k. What is 300k to a person who left the city and just sold a home half the size for 1.4 million? Point is, market pricing ruled the day, not simply on demand, but based on stupidity and frenzy of the buyers. Who could argue though? When the average buyer establishes the value of a purchase on a minimum payment, all sorts of stupid evolves and the low interest rates allowed the average short sighted and inattentive buyer to really meet that description.
This is far too simplistic of an explaination. Profit margins will always be higher in some areas than others. Maybe you have a point here but I do not know. If your grandfather built houses in Oklahoma and you are saying that the model he used is the same as should be used in building homes overlooking the ocean, I will disagree but then on the other hand I'm not all that interested in discussing the home building industry.
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I wish I could believe such, but the fact is, low interest rates and irresponsible loan practices brought in a "buyer" who had no business in the market.
Which while a point many have made, it doesn't address what I said.
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True, and this is what needs to happen. The Fed has been fixing the books and someone needs to slap them upside the head (Sorry to sound all conspiracy theory, but we are where we are because a select group is making a killing right now). My parents and grand parents are making crap on savings. CD's are garbage and most investments similar to such savings are paying pennies due to the scam the feds are pushing. The good news is that as you said, when interest rates go up, people will pour money into savings, investments of such nature and companies will also do the same. This is good all the way around. Those keeping the interest rates down are punishing the frugal and attempting to reward the wasteful (obviously to profit off of such).
It's not that difficult but it's not what Wall Street wants. As we have seen the for entirety of the last 15 years or so, they are getting whatever it is they want.
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Not everyone was hit with such. Some areas had less of an impact. I noticed many parts of Texas were untouched by such when I first moved here. Thing is, stupid burns itself out, then seeks another source of fuel to keep itself going. Texas prices have started to rise due to a large influx of people running from states that are over priced and lacking, but the problem is... they aren't moving here with intelligent spending methods, they are buying at stupidly high prices because they think a a 400k home is a steal compared to the home the left that was nearing a million, even though that new home is actually only worth about 120k in natural value. It isn't because of "competition", "demand" or the like, it is simply because they evaluate value on means that are just as unrealistic to a means of the states the left from. That is, a fool and their money are soon parted.
There is nothing wrong with prices rising if there are lead by actual, true demand.
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When the interest rates go up, obviously, variable loan holders are going to run and dump them on the banks. Because of the interest rates and the fact that the wages not being proportional, most will not even be able to afford the current home prices and qualify for the loans. This means, housing will drop dramatically. This is great for those who are watching the markets, who understand how much they are paying entirely over the loan and take advantage of a higher rate, lower price home, but here is the issue...
As a generalization, if you are in to a variable rate right now you are a fool.
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We are in for a crash the moment interest rates go up. It will be huge. We didn't escape anything before, we just tried to buy it off with time. The crash is coming, and it will hit HARD.
For the percentage that this might affect it would be easy to address and something the administration has claimed over and over they would but instead they heard the beck and call of Wall Street.
Labor cost is the biggest bamboozle in this issue. Tell me, how much did it cost the developer to build a home that cost him a 100k when he turned around and sold that home for 300k?
You see, natural pricing while relevant to the bottom line is not considered when we look at the market and buyer stupidity. Seriously, I have seen a developer and his costs be according to a 120k homes after being built, turn around and adjust that cost by 100% or more. So please don't tell me about land costs, etc... I understand such adjustment. As I said in my mention, I watched a development increase in price by a 100% when there was a buyer frenzy of extremely stupid people. By the way, they weren't buying lake front property, they were buying rocky poor soil property only because idiots from the city thought it was an amazing buy compared to their stupidly million dollar shacks they were selling near the city.
And school districts? Low crime? Proximity to jobs and cultural amenities? Were those in your "adjustments"? To put it simply, a house is worth whatever someone is willing to pay for it.
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