In an article in the San Diego Union-Tribune "Despite rising interest rates, a growing for-sale inventory and a slowing sales pace, the county's shortage of housing will prevent prices from dropping steeply, speakers asserted. 'It's Economics 101,' said Leslie Appleton-Young, chief economist for the California Association of Realtors. 'It's demand and supply.'Demand and Supply? It's Supply and Demand. These clowns at the California Association of Realtors should not be taken seriously.
Looks at the above slide from the California Association of Realtors' 2006 Economic Forecast.
What is odd?
Notice the question mark next to the word speculation. They can't even admit that speculation is driving rising home prices. They need to say its a 'mere' possibility.
Clowns!
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My experience is that when someone says "economics 101," they are about to say something stupid.
ReplyDeleteLook at their reasons there. Low mortgage rates...how long will that last? Baby boomers... start retiring soon. Constraints on construction... where? What about all these condos? Low inventory... not so low anymore.
I guess that leaves... SPECULATION!
I have a greography background also.
ReplyDelete"Constraints on new construction" as evidenced by record numbers of housing starts over each of the last several years?
ReplyDelete"geographers are weird birds"
ReplyDeleteLOL!
Some of the realtors I know in DC admit glumly that its slow. Though most think it will pick up next year. I'm hoping it picks up so we can avoid da bubble.
ReplyDeleteWhen the baby boomers retire, they are counting on their home equity as their 1st or 2nd nest egg. My dad is counting on it. At least for him it will be his 3rd egg, but if he got yesterday's prices, it would be the highest priced egg. Right now he'll be lucky if it matches another egg.
ReplyDeleteHe's got 16 months to go until he can retire. Too bad by that time, prices will be down 25% with more to go. Since he has 12-16hrs put into his garden each week, I'm sure he's also really attached to the place.
As far as work place mentality, there is always a new vehicle in the parking lot every two weeks (200 employees). I'm guilty on that account too (in 2004).
ReplyDeleteHowever, the house buying mentality has changed. There were a few people who just bought their house while a few coworkers and I sold ours (and rent). The buyers are now questioning if they did the right thing and are nervous. I think if I sent one guy links to all these housing bubble blogs, he would literally have a heart attack.