Abolish all taxes except...

...the property tax:

In 1879, Henry George ... found it perverse that we tax productive activities like work and innovative investment while letting landowners grow rich simply because they scooped up property at the right time. In that spirit, George called for a “Single Tax” on the unimproved value of land. There’s a certain compelling logic to the Single Tax that stands the test of time. When you tax income, aren’t you punishing people for working hard? But when you tax an asset like land, you’re simply encouraging the most valuable use of that land. In the years since George faded from the scene, a number of economists, from Milton Friedman to Paul Romer, have found virtue in the Single Tax...

Via Rebecca Wilder

What Sort of Housing Style Do You Prefer?

Or?

Or something completely different from the above two images?

Please join in the discussion of 'What Sort of Housing Style Do You Prefer?'

Case Shiller Home Price Index Up Again For Washington Area

The Case Shiller Home Price Index was up for the second month in a row in the Washington, DC metropolitan. In May, it rose .67% on a seasonally adjusted basis.

Is this the bottom for the DC area or will prices start declining again later in the year?

Here is MarketWatch Article on today's number's.

Home prices: DC vs. California and Florida

Graph: Home prices in DC proper, vs. California and Florida.


Home price data comes from the Federal Housing Finance Agency's House Price Index. Note that it only measures homes with conforming mortgages. (Homes with subprime mortgages are not counted.) Also note that the index is not adjusted for inflation.

Local Housing Blogs

Below is a small list of some of the local Washington, DC - Baltimore Area Housing Blogs:

• Frankly Realty (Virginia)
• Northern Virginia Housing Bubble Fallout
• Baltimore Housing Bubble

These links are always on the right side of the Bubble Meter home page.

"We needed a recession"

Thoughts from Harvard economist Jeffrey Miron:

By the end of 2005, it should have been apparent that the U.S. economy was fundamentally misaligned. We had significantly overinvested in housing and significantly underinvested in factories, plants, and equipment. In effect, we needed a recession: a period to readjust the balance between the different types of capital.

More broadly, failure is an essential aspect of free markets. Failure shows capitalism is working, because it means resources are moving from bad uses to good uses.

Monthly Home Price Changes Washington DC Metro Area

Click on image for larger view

Please note that there was much discussion on this blog about the meaning of the increase in home prices in April 2009. This was the first monthly price increase since 2006. Looking at the larger picture, it still seems that monthly price decreases will resume later this year. The prices decreases are not yet over. Expect small monthly price decreases later this year. In my mind most areas of DC are likely to see another 5 to 12% decrease in home prices.

On vacation

I'm gone for summer vacation for the next two weeks. I'll be back in the first week of August. I have scheduled a few short posts to appear while I'm out, but David says he'll blog while I'm gone.

Here's my view for the next two weeks, assuming good weather:

Where the foreclosures are

The darker the red, the more the foreclosures.Source.

Short sales are increasing

From The Washington Post:

The number of short sales completed jumped 208 percent during the first quarter of this year compared with the same period in 2008, according to a report issued last month by the Office of Thrift Supervision and the Office of the Comptroller of the Currency, which regulate banks.

Short sales could increase further as home prices continue to fall, leaving a growing number of borrowers owing more than their home is worth. Also, the Obama administration is implementing a program to pay lenders to accept less than the balance owed by the borrower in such deals. ...

Last year, about 5 percent of home sales in Loudoun County, one of the hardest-hit parts of the region, were short sales. Now they account for about 23 percent of the market, said Tony Arko, an agent for Market Advantage Real Estate.