2 votes

Who Can Afford to Buy the Houses to Sustain the Real Estate "Recovery?"

Who Will Buy the Houses to Sustain the Real Estate Market?

The current real estate recovery is characterized by higher home prices driven by low inventory and high demand relative to the existing inventory.

The demand is driven by Fed induced low interest rates that has invited speculators to the real estate market.

In many areas fewer homes are being sold this year than last year (when not many homes were sold), yet prices continue to soar.

A sales down, prices up dynamic is not the characteristic of a healthy sustainable real estate market.

As I mentioned in a recent WSJ Marketwatch article, a healthy housing market thrives on a vibrant jobs market. Currently the job market is weak, especially among millennials who should be providing the pipeline for future homes sales.

http://smaulgld.com/can-the-housing-recovery-continue/

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

In no other time in history has commodities and real estate

gone up in value but gold and silver gone down in value. If you want to own a nice home in the near future, buy gold or silver now. I am looking forward to a nice home selling for 300 to 500 ozs of silver in the near future. Silver is at $20 per oz now. you should be able to get a $200K home for $10k of silver. If there is a total collapse of the dollar then all bets are off, you could get that home for 50 oz of silver or even less.

Mike Maloney explains it very well here: http://www.youtube.com/watch?v=tj2s6vzErqY

Gold standard: because man can not be trusted to control his greed

The federal reserve created

The federal reserve created an artificial scarcity by taking millions of houses off the market and turning millions into rentals. Anyone buying in the overpriced markets are suckers.

and they have done the same in the stock market

with low interest rates companies can buy back their shares thus removing "inventory" of shares from the market making their earnings per share look higher and driving their share prices higher

Please subscribe to smaulgld.com

...and collapse it will and soon...

"Necessity is the plea for every infringement of human freedom. It is argument of tyrants. It is the creed of slaves." William Pitt in the House of Commons November 18, 1783
"I have one word for you...predator drones. Oh, you think I'm kidding?" Obombya

What pisses me off the most is how shitty the houses on the

market are. The previous owners (mortgage holders) mortgaged decent houses, let them fall apart, and then refuse to sell for a lost. If you buy something and let it go to shit, how can can expect to sell for more than you paid. So many houses on the market are so old and need so much work, but they are still selling for well above market value.

this post hits a nerve

my wife and I are small business owners and have been trying to buy a house for the last 2 years in Seattle's market.in the last 2 years prices have gone up 35 percent and are anticipated to go up another 10 percent next year. Prices during the'crisis' only fell by about 20 percent. 900 square foot s*** boxes with no yard built in the 30's a half an hour's drive outside of Seattle here runs about $200,000, and when we were kids we would consider house is like these the pork peoples houses. Your average1200 sq foot in the city is about $350k. sure we'd love to move out of Seattle but unfortunately we've spent the past 5 years building a clientele and established our business in the city.also there seems to be more houses on the market than ever beforeas people who bought at the peak of the market are now trying to break even and sell.alas the prices continue to go up. I was talking to my dad the other day about the first house he bought in 1964 in Florida which cost him about a year of his salary. For us or anyone in this day and age to buy a house at the cost of a years salary is impossible. Sure we could mortgage the rest of our lives to pretend we own somethingbut it would still be a piece of s*** . now that we consider ourselves upper middle class it's the peak of our frustration to find that we can only afford what we used to consider a poor persons home in a shitty dangerous area. the American Dream is dead! I'll say it again the American Dream is dead! Long live neo-serfdom!

In 1970 a car costs about $2-3K

and people made about $15K.So a car was 5X less than your salary. No one financed cars, they saved up and bought one.
Today a new car is well over $20K and people don't make $100K+ but they still have cars in their drive ways -they just don't own them they have borrowed to get them

Please subscribe to smaulgld.com

and for $15-20K you could get a decent starter home

For $30-40K you could get a full blown decent size home with large amount of land, 4 bedrooms & two car garage. Today that type of house ranges from $400K-$1.4 million depending on location.

So you have to be making $250-$900K a year to afford a house like that (even if you made $900K you'd lose most of it in taxes)
It really doesn't matter that interest rates are low-you will still owe a ton of money to buy a home that is well in excess of your salary.

Please subscribe to smaulgld.com

And your Dad was probably able to do this on his salary alone,

while Mom stayed home to raise the kids, like mine did.

now We wait patiently

For the next collapse. It's our only hope for a salvageable future. its sad that you have to hope for economic Destruction to have a shot at getting your foot in the door. I'm tired of working my ass off everyday just to have my reward stolen from me and waking up everyday full of anger and resentment. It's hard to get used to the fact that life has become 'pay a lot more and get a lot less.

Barely anyone buys a house.

Barely anyone buys a house. They take out a loan for it. 30 years later you can say they've bought the house. People are figuring out that you don't own it because it's under a mortgage and you still have to pay property taxes, so people are renting. People are generally not starting families, so another reason why people don't need houses.

Please come join my forum if you're not a trendy and agree with my points of view.

Linda Cross's picture

It's not just property taxes.

To do anything to your property from fixing a broken window to changing a leaky faucet, first it must be an allowable action, allowed plans, materials efc. Then you must get the Mafia's permitsion, and pay them off, fees. If there is a y money and time left, you may fix the problem.

If you see something, say something, the government is listening.
Silence isn't golden, it's yellow.

with out widespread buying of homes

there is no recovery and if there is no recovery do you think the fed will "taper"? they need to boost housing and so far all they managed to do was get prices up in some markets

Please subscribe to smaulgld.com