Lets push aside the prices of housing for a second and focus on the upkeep of what it takes to own a house, the cost of living today is way out of touch for most, you need two incomes to live comfortably in most areas of the US. The taxes alone in some areas are extremely high, around my area within 10-15 miles of where I live there are neighborhoods where taxes go as high as $30k-$50k a year. Other areas between $8k-$12k! Add taxes, utilities and everything else and were talking thousands and thousands a month, with 24 million people out of work and underemployed, 6+ million households falling behind on their monthly payment, along with 46 million on food stamps there is no turn around in housing happening anytime soon!
Homebuyers now stepping away real estate, blaming it on the bear market drop.
- Thread starter S2007S
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It will be interesting to see how many creative inventions politicians will concoct to avoid a fast deleveraging. Most of it will probably be pretty destructive economically and these policies will have to be in place for a looong time as these asset inflations have built up over decades.
Lets say a ruling party manages to catch the falling knife and start asset inflation again; they will most likely be considered to have done a good deed by society. Square 1 again
Lets say a ruling party manages to catch the falling knife and start asset inflation again; they will most likely be considered to have done a good deed by society. Square 1 again
Completely agree, the devil is always in the details with this stuff. Property taxes in many locales are a deal breaker, plain and simple. It doesn't even get to the point where the utilities become a concern (which they most certainly are). Upkeep is another big cost.
In some regards, I think that record number of homeowners we saw at the peak about 4-5 years ago got a very real taste of these expenses. They are bad enough when you are being "phantom" taxed on the accrued appreciation of your dwelling, but then all the utilities got in on the game and started the nickle and dime routine.
Just go thru Zillow or Trulia and note the property tax trends for many houses from 2000-present. For all of the homeowners who didn't cash out at the peak, it's a helluva lot more expensive to live in that same house than it was 10 years ago, nevermind that valuations in many of these locales are right back at those prices. The school administrators are loathe to ever reduce headcount and salaries to give the homeowners a break.
Quote from FrostBead:
It will be interesting to see how many creative inventions politicians will concoct to avoid a fast deleveraging. Most of it will probably be pretty destructive economically and these policies will have to be in place for a looong time as these asset inflations have built up over decades.
Lets say a ruling party manages to catch the falling knife and start asset inflation again; they will most likely be considered to have done a good deed by society. Square 1 again
By my count, we are on our third engineered asset inflation in the past 12 years. The first time around it was a "win-win" since commodity prices were at rock bottom levels with a very strong dollar. The second time around, it was alot more painful as commodity prices began to really outpace the gains in so-called "good asset inflation"; albeit the consumer was high on the rapid price appreciation in their dwellings. It was enough, at that time, to ignore all of the "bad inflation" that was stirring as a result of these policies.
This last time around (2009-present), there's been far more bad inflation and a minimal amount of good inflation. Not to mention the fact that with ZIRP, more and more people are actually liquidating their accounts to pay down living expenses. Now that we are dipping and diving again, the political backlash has become incredibly toxic. I have my doubts about any sort of audience for continued engineered asset inflation. As we see currently, the only asset appreciating is gold and that speaks volumes.
Since 2000 to now living expenses have gotten way out of touch, it is very expensive, it seems living expenses have gone well and beyond where they should be in this economy. There hasn't been a fix in this area yet and until that happens many people will be priced out of the market, plain and simple. BUBBLE ben bernanke can take the 30 year fixed to 2% and it still would not create demand for housing, expenses over the last decade have skyrocketed. Taxes in the area where I live are still rising, they haven't gone down and wont anytime soon.