From September 25, 2005, the geniuses at two Ivy League business schools said there was little evidence of a housing bubble:
Most cities in the United States showed little evidence of a housing bubble as of the end of 2004, according to a new study conducted by Columbia Business School and the Wharton School of Business at the University of Pennsylvania, which looked at 46 single-family housing markets from 1980 to 2004.
The researchers found that recent growth rates of home prices do not reflect a bubble and were largely explained by basic economic fundamentals such as low interest rates and strong income growth among high-income Americans.
No evidence was found that buyers are bidding up the price of houses based on unrealistic expectations of future increases.
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I live in a townhome community in Alexandria (Fairfax County), VA. Between when I bought in Fall 2003 and early 2007 about 3/4 of the purchasers had Muslim or Hispanic surnames. That is based on reviewing the sales listings in the Washington Post real estate section. About 75% of them no longer live in the community. These are facts and not anecdotal observations.
ReplyDeleteThe peak sales price was back in middle 2006 of around $465,000. Now because of the "fire sales" it is around $310,000. That is a 33% below the peak. The worst drop previous to this was during the Depression when prices plunged 30%. On top of it all the average household income (for now) is $105,000; so the ratio of price to income is around the historic level of 3.
Now the stock market is at valuations that indicate significant undervalue, and at the same levels in 1997!!!!!! Three words to describe October's behavior: EXTREME IRRATIONAL PESSIMISM. The Sheep are getting led to slaughter and the foreign sovereign (ie., royal family) and George Soros Funds are buying up these shares.
Dude, you left this same comment over at Novabubble. Give it a rest.
ReplyDeleteAnonymous, give it a rest? Why don't you like what is being stated? Are you a vulture buyer looking to make some killer deals?
ReplyDeleteHow about this quote:
"The declines have made homes more affordable, bringing prices in many areas closer to their long-term relationship to incomes. In the second quarter of 2008, the national median home price of about $203,000 was 1.9 times average pretax household income, according to Economy.com. That was close to 1.87 times income for 1985 through 2000, prior to the housing boom."
source of quote: http://www.msnbc.msn.com/id/27089919/page/2/