Wednesday, February 18, 2009

Housing - The Party That Won't Start

Today, Obama announced his housing rescue plan.  It basically boiled down helping out "responsible" home builders by giving them access to low cost financing so long as they are not too underwater on their mortgage.  It also created some incentives for lenders to modify loans for "at risk" homeowners who are in danger of defaulting.

All of this will be in vain.  I really just do not understand how others, supposedly smarter people do not understand this.   Let me try to explain in very small words.

Rising housing prices is bad.  If housing rises faster than incomes, then you are pricing out a class of people, new homeowners.  People who get happy when the price of their primary residence rises are foolish.  It does absolutely nothing for you if everyone's house is rising in price as fast as yours.  If you sell your house, you are going to buy another one.  Rising housing prices will in fact hurt you because you pay taxes as a percentage of your house's value.  You also pay closing cost and other real estate fees when you sell your house as a percentage of the sale.  So you are paying more and more for each of these transactions.

Now, this may be just fine if you are in housing already.  You can swap houses with other homeowners and pay more and more for that asset. But at some point, for the asset to really be worth more, you need outside money to come in and buy the asset from you.  For you to "move up" you have to get someone to buy your starter home.  How is this going to happen if your price is too high for the average person to afford?  It won't.

This is a simple economic fact.  Housing prices will not stabilize until an average family can afford the average house and we are still far away from that.  Anything that attempts to prevent the housing price correction, such as this plan, is only stalling the inevitable.  This plan does not and cannot create demand at the bottom.  It actually does the exact opposite by keeping demand artificially low by keeping prices artificially high.  The government can throw however many billions or trillions they want at the problem.  Until someone addresses the question of how the average American can become a homeowner, prices are either coming down or we are staying flat for another dozen years.

40 comments:

  1. Hello Guru, what entice you to post an article. This article was extremely interesting, especially since I was searching for thoughts on this subject last Thursday.

    ReplyDelete
  2. Investing in student accommodation investment is good because of excellent fundamentals of low vacancy rate and high income. The potential of investment rental property in the UK is fully explored.

    ReplyDelete
  3. nice https://www.doublejourney.com/2009/02/housing-party-that-won-start.html

    ReplyDelete
  4. Heutzutage ist es in dieser Zeit am schwierigsten, den genauen Wohnsitz zu finden. Heidelberger wohnen erleichtert die Arbeit erheblich, indem Einzelhändlern, Käufern, Mietern und Vermietern eine Website zur Verfügung gestellt wird. Interessierte können bei Bedarf hier http://www.skyhave.com/read-blog/768_zuverlassige-informationen-zu-makler-heidelberg.html klicken oder unsere echte Website besuchen, um mehr über Immobilien Heidelberg zu erfahren.

    ReplyDelete
  5. Selling residences with Oceanside isn’t fiction like it is one of many complex work if anyone is. A lot of people engage estate agents are generally real estate when it comes to Oceanside. Whenever you stop by the following https://endd.mystrikingly.com/blog/tips-on-condos-for-sale-oceanside-ca-you-can-use-today websites, you can obtain a large number of particulars about Oceanside Homes for Sale.

    ReplyDelete

  6. You'll find so many crypto tools claiming so that you can twice over bitcoin more rapidly, and then moon bitcoin live is one of them. It actually is getting people by providing business earnings, but actually, it’s ineffective, as well as those shouldn’t to make use of. System produces . the https://endd.mystrikingly.com/blog/unanswered-questions-into-moon-bitcoin-investment-revealed blog, a person might gain more knowledge about any moon bitcoin live.

    ReplyDelete
  7. One could acquire the best caliber Mens Stretch Jeans by means of the actual Size Up Apparel foundation. Individuals take advantage of this website end up with a wide range of possible choices associated with trousers and various other apparel that should ideally pull in these folks. With the use of this amazing https://blog.storymirror.com/read/jbomprdi/the-ultimate-guide-to-mens-stretch-jeans page, an individual can acquire more knowledge about all the Mens Stretch Jeans.

    ReplyDelete
  8. Men and women who interest to make their own bodies much healthier and become gone body fat may want to operate using the top apple cider vinegar supplements. Your top apple cider vinegar supplements build a slim overall body and additionally much more powerful health to every single unique. In the event that online searchers make use of https://www.evernote.com/shard/s719/sh/9029a90b-a955-919b-0a4c-c7f263153658/8e7cf2f261c7f1642372dc2021dc775f web pages, most people get more just top apple cider vinegar supplements.

    ReplyDelete
  9. Multiple men're developing their unique erections to eat a handful of the top male enhancement pills daily. A top male enhancement pills heighten on your penis size combined with enhance the intimacies effectiveness associated with person fully. By utilizing this type of https://nych.mystrikingly.com/blog/gain-huge-success-with-male-enhancement-pills web site, you could gain details of all the top male enhancement pills.

    ReplyDelete
  10. Through the use of the entire best cbd oil supplements, individuals can remain healthier and receive eliminate a multitude of adverse body health at a matter of minutes, as for instance, sleep issues, pressure, gloominess, distress, aggravation, and others. System produces . this excellent http://blogs.rediff.com/omrilver/2022/02/24/why-you-need-to-be-serious-about-best-cbd-oils-review/ internet sites, may purchase more knowledge about the best cbd oil supplements.

    ReplyDelete
  11. Most of the consumers opt to build headgear lift kits simply because lift kits increase the overall performance of your automobile as well as provide a more rewarding visual appearance in to the van. Customers can purchase various types of lift kits they add on the models. Employing this kind of https://blog.storymirror.com/read/6busp9uw/tips-for-monotube-shock-you-can-use-today web page, an individual may secure details of Liftkit.

    ReplyDelete
  12. Folk frequently give preference to a best hemp cbd oils as being the best hemp cbd oils scale down anxiety symptoms, sadness, suffering, and also other illnesses effectively and efficiently. By employing the idea http://blogs.rediff.com/lezmage/2022/02/28/positive-aspects-associated-with-best-cbd-oils-review/ location, a person might buy details of these best hemp cbd oils.

    ReplyDelete
  13. OwlRatings is devoted platform providing you with the full point among the Soap2day base. Individuals that absolutely love gazing at movies really should don't utilize the Soap2day console considering that it spreads source as well as put buyers on the line. Making use of this kind of https://blog.storymirror.com/read/qwnl8j8n/the-necessity-of-soap2day webpage, an individual can have details of OwlRatings.

    ReplyDelete
  14. Fashionable among 123movies is growing for a plenty of cost since the device affords the new movies that women can observe ever before. Now you may observe movies without having money on this approach stand. With the help of it https://www.blendspace.com/lessons/M10oNE5AGwOMkw/the-side-of-123-movies internet site, a person might down load more knowledge about 123movies.

    ReplyDelete
  15. Minimising fat in the body has grown to be much easier per various by way of all of the best fat burner supplements. Our best fat burner supplements construct a slim and then greatly improved your body to any different within the 100 % natural direction. However, if users make use of http://blogs.rediff.com/nyestkin/2022/03/02/best-fat-burner-supplement-an-important-source-of-information/ internet page, they can have more details of the entire best fat burner supplements.

    ReplyDelete
  16. The actual best turmeric supplement shows improvements resistance and furthermore romantic heart well-being inside of an competent approach. Consumers go for rapidly weight reduction effects and then rapid help by way of swallowing the best turmeric supplement. If it turns out users of the https://blog.storymirror.com/read/qdval3fn/are-you-thinking-of-making-effective-use-of-turmeric web site, many find more exactly the entire best turmeric supplement.

    ReplyDelete
  17. Folks that need to overall health in shape in addition to health boosting will use the best weight loss supplements. These best weight loss supplements relieve needless extra belly fat and build our systems health boosting via an powerful means. Assuming internet surfers take this https://slashdot.org/journal/3493121/what-makes-best-fat-burning-weight-loss-formulas-so-special webpage, most people have more understanding of this best weight loss supplements.

    ReplyDelete
  18. The best bad credit lenders make certain it is less difficult for individuals to have a customized personal loan within the bad credit score. Individuals get an swift private financial institution bank loan through the help of the best bad credit lenders. If internet customers take advantage of this http://blogs.rediff.com/hykimage/2022/03/20/importance-of-bad-credit-loan-lenders/ web site, they attain much more info on the best bad credit lenders.

    ReplyDelete
  19. The best cbd gummies offer you immediate respite from soreness without difficulties, and folks also remove human brain concerns and pain utilizing the best cbd gummies. If internet users use this https://www.evernote.com/shard/s400/sh/b278fef9-d8f3-08bb-f40b-8f504fe3cbad/18cc004bcf0d6be6e0ed4cf64410604b website, they get more information regarding the best cbd gummies.

    ReplyDelete
  20. Four Elements Trainer is considered among the well-known matches as well as brandished by a few gamer partisans. Competitors is able to a variety of projects that will receive recreational on the game. Should you pay a visit to this process https://www.scoop.it/topic/biantlor/p/4132082037/2022/05/04/unknown-facts-about-four-elements-trainer-revealed-by-the-experts site, you may get a large number of info about Four Elements Trainer.

    ReplyDelete
  21. Milftoon Drama belongs to the most important variety of a lot of people as it is probably the greatest computer games so helping a person to watch the action productively. A player can certainly connect with their particular sperm fantasies around the game without having road blocks. If you ever head over to this excellent https://www.scoop.it/topic/biantlor/p/4132097053/2022/05/05/what-are-the-well-known-facts-about-milftoon-drama internet site, you can get progressively more details of Milftoon Drama.

    ReplyDelete
  22. Uijeongbu business trip massage service supplies better restoration and a terrific level of pleasure to folks. One will be capable to feel relaxed with the aid of the Uijeongbu business trip massage. By utilizing this https://friendship.money/read-blog/12601_important-tips-about-finding-%EA%B0%95%EB%82%A8%EA%B5%AC%EC%B6%9C%EC%9E%A5%EC%95%88%EB%A7%88.html site, an individual can receive more knowledge about Uijeongbu business trip massage.

    ReplyDelete
  23. ACADEMY34 may be a highly popular mature person online game which people today may experience extreme fun. Players of which carry out ACADEMY34 obtains a variety of adventures and therefore person material that supply them an adequate amount of gratification. In the event web users take advantage of this https://www.behance.net/gallery/143072821/Lets-Get-Aware-About-special-Academy34 web page, these individuals have more details about ACADEMY34.

    ReplyDelete
  24. Most battlers would like to carry out Hentai games because Hentai games assist them to satisfy your craziest lovemaking dreams without the benefit of difficulties. It is always quicker to retrieve plenty of Hentai games by all the Eroge operating system. Once you have a look at this unique https://slashdot.org/journal/3495052/what-are-the-well-known-facts-about-erogeio-hentai-games website, you can receive a growing number of specifics about Hentai games.

    ReplyDelete
  25. A majority of people try their fortune in multiple gambling activities, yet online hold'em is very much desired by most individuals. It is among the most beneficial games and makes it easier for individuals to make money. If you take a look at this https://lodyndra.wixsite.com/my-site/post/%ED%99%80%EB%8D%A4%EC%9D%84-%EC%96%B4%EB%96%BB%EA%B2%8C-%EA%B8%8D%EC%A0%95%EC%A0%81%EC%9C%BC%EB%A1%9C-%EC%82%AC%EC%9A%A9%ED%95%A0-%EC%88%98-%EC%9E%88%EC%8A%B5%EB%8B%88%EA%B9%8C site, you could get more and more knowledge about online hold’em.

    ReplyDelete
  26. A large number of gambling lovers are experiencing quite a few gambling activities through several platforms, but many betting followers aren’t getting ideal services on a number of gambling platforms. In case online users utilize this https://social.urgclub.com/read-blog/16614_%EB%A8%B9%ED%8A%80%EA%B2%80%EC%A6%9D-%EC%9D%B4%EC%A0%9C-%EC%A7%80%EC%8B%9D%EC%9D%84-%EC%8C%93%EC%95%84%EB%9D%BC.html site, they acquire more information regarding the toto site.

    ReplyDelete
  27. Folks acquire many choices for Eat-and-see communities all over the net, nonetheless TOTO DUBAI is regarded as a very well-liked and the greatest Eat-and-see community. In this amazing community, every gambler will acquire secure and safe betting sites to enjoy staking games. If perhaps online surfers take advantage of this https://xiglute.com/blogs/19950315/171106/- site, they receive more particulars about the Eat-and-see community.

    ReplyDelete
  28. There are lots of wagering followers who desire a trusted eat-and-run verification company because a trusted verification company suggests risk-free betting sites. Everyone can ideally find a reliable betting site with the aid of the eat-and-run verification company named MUKTI BANG. If internet surfers make use of this https://kelmortor.corplaunch.com/users/blog/6162249/2158497/kibanryn/?gid=589256 site, they obtain more information about the eat-and-run verification company.

    ReplyDelete
  29. Dalam kasus di mana selesai. datang ke investasi properti, masing-masing menggambarkan keingintahuan Anda tentang pasar tertentu saat ini, dan hampir setiap orang perlu memanfaatkannya untuk menemukan kualitas yang berbeda-beda. Jika Anda memutuskan untuk menuju ke situs informasi https://sites.google.com/view/estnalsul/aspek-positif-terkait-dengan-ruko-dijual, Anda akan menemukan lebih banyak detail ruko yang dijual.

    ReplyDelete
  30. You have to be certain, when you have sourced a traditional dropshipping suppliers, you discover the fact that they function, therefore, you get experience to organize your corporation along with your potential clients. Greater will be to just click here https://app.box.com/s/90jj8j6jpeub9njz30tn8gs8hpbmp1zs or browse some of our proper internet site to are familiar with dropshipping products .

    ReplyDelete
  31. Sending private messages to some other individuals is a lot liked by every person, and it is possible for folks to send texts privately through many online platforms. Through the use of this https://theomnibuzz.com/are-you-making-effective-use-of-private-message/ site, a person can attain more knowledge about private message.

    ReplyDelete
  32. Relating to creating your creations needled on against your tshirts, you usually must sure that the quantity of all your designs to your t-shirts arrives how you hoped for. you must for a realizing for this obvious t-shirt stamping actions if you wish to a particular can work the tone that you will be hired by. Especially those with presumptions to be familiar with custom printing boca raton and additional tips feels able to head to http://blogs.rediff.com/tibiry/2022/06/14/the-effective-role-of-car-wraps-boca-raton/

    ReplyDelete
  33. To obtain replica designer clothes, everyone prefers to take advantage of the finest online store in the online world. Designer Brands is one of the best sites to acquire the best replica designer clothes. In the event you pay a visit to this https://www.dewiring.com/read-blog/39637_replica-designer-clothes-have-your-covered-all-the-aspects.html site, you can acquire increasingly more details about replica designer clothes.

    ReplyDelete
  34. Muktupolis 플랫폼을 사용하여 안전하고 안전한 베팅 플랫폼을 선택하는 개인이 많이 있습니다. 가장 신뢰할 수 있는 커뮤니티로 평가받고 있으며, 구현하기에 리스크가 없는 토토 사이트 및 주요 사이트를 보증합니다. 이 http://www.anunciase.com/blue/blogs/post/63900 사이트를 활용하면 누군가가 묵투폴리스에 대해 더 많은 지식을 얻을 수 있습니다.

    ReplyDelete
  35. La mayoría de los vendedores con licencia de Nissan son confiables y pueden brindarle la ayuda que necesita sin necesidad de engañarlo. En la pieza, es esencial ser un comprador informado para que normalmente no se vea comprometido de ninguna manera. Infórmese claramente, genere un pedido cauteloso y también verá que recibir las buenas piezas de Nissan en Internet es menos difícil y mucho más fácil de lo que pensaba. Si es necesario, las personas interesadas pueden hacer clic aquí o visitar nuestra página web oficial https://theengen.blogspot.com/2022/06/como-puede-usar-repuestos-nissan-de.html para saber más sobre repuestos Toyota.

    ReplyDelete
  36. There are lots of betting enthusiasts who mostly implement their phones and computers to engage in quite a few gambling activities, for example, online slots, online poker, online roulette, online hold'em, and much more. By utilizing this https://moskver.blogspot.com/2022/06/blog-post.html site, somebody can receive more understanding about online hold'em.

    ReplyDelete
  37. With the assistance of methamphetamine, folks can reduce attention deficit hyperactivity disorder in a few moments. The utilization of methamphetamine also aids individuals to grab superior power and increased cognition. By making use of this https://zenwriting.net/enthkelage/gyeolron-jigeum-haegsim-gaenyeomeul-ihaehasibsio site, someone can attain more information regarding methamphetamine.

    ReplyDelete
  38. You'll find so many ladies are getting look-alike such as shoes among other copy gadgets, quite a few the women continues to be can not pick the best online website. Designer Brands is often a consistent shop for any couple to buy replica gadgets. When you look at this valuable https://untoughin.mystrikingly.com/blog/is-replica-clothing-valuable blog, you obtain alot more details about high quality designer replica handbags.

    ReplyDelete
  39. The net has numerous alternatives of Eat-and-see communities, nonetheless TOTO DUBAI is the very best Eat-and-see community. Bettors get safe and secure wagering sites with the assistance of this particular community. In case online users make use of this https://medium.com/@essgeiss/%EC%95%88%EC%A0%84%EC%82%AC%EC%9D%B4%ED%8A%B8-best-service-providers-available-today-88d6f92d7d3f site, they obtain more information regarding the Eat-and-see community.

    ReplyDelete