Here we go folks. in our race to the bottom and the stagnant wages the housing market is now becoming not affordable to many. The next step is trying to make the housing fit the incomes. Maybe we can loosen some of those restrictions and build the houses cheap enough out of cardboard. The market will probably open up to Chinese prefabs that can totally put all the tradesmen out of work. Maybe then we can have a complete service oriented work force.
http://finance.yahoo.com/news/next-hous … 05885.html
Did you catch the slap on the wrist to lenders?
"Meanwhile, mortgage lenders, despite record-low rates, are still reluctant to extend credit to less-than-superb borrowers."
In other words, they need to make more low quality, less secure loans. Just what caused the recession we finally (mostly) worked our way out of.
When I built my second house, I paid $9,000 for a lot to build a $120,000 house on. The lot was 7% of the package price. It was in the middle of nowhere, 50 miles from any real city and some 25 miles from a town of 10,000.
My current house has the lot being shown at very nearly half the cost of the package of lot + house. In a "bedroom" town of a small city.
When Krispy Kreme doughnuts built a store about 3 miles from me, on the busiest intersection in the state of Idaho, the purchase price for the land was over $1,000 per square foot! Something like 40 million per acre, about 10 years ago. I'm sure it has gone up since then.
The biggest problem with housing cost isn't the cost of the house - it's the cost of land. As we cram more and more people into metropolitan areas this is inevitable. That we are trying to reduce transportation costs and time, pollution, urban sprawl etc. doesn't change that the result is going to be a skyrocketing of land prices. There is a price for everything, and that's one of them for city living.
If you want cheaper housing, move to small towns far from the city. It's still available, where no one wants to live. If you demand a home in a metropolitan area, well, you're going to have to outbid all the other homeowners that want the same thing.
The middle class does not own enough financial assets to have participated in the latest stock market bubble, while the majority did not recover the wealth lost in the housing bubble bust. This is the cost of allowing the financial sector to financialize housing and mortgages in the 2000s.
There are several interesting graphs to see on this webpage. You might not like what you see, so be warned if you are trying to keep your blood pressure down.
I sold my cozy little house about three years ago so that I could move back home to take care for Mom. I was surprised to see that the property taxes for this year actually when down $40., I was expecting the opposite.
Another disturbing trend is who are buying the used homes in the aftermath of the meltdown. I have noticed the predominant title transfers in our area of Maryland to be banks and investment groups. I find it so ironic that those who were so responsible for being bailed out were not only saved by the taxpayer but are now taking ownership of these homes as well. It is like a one-two punch.
To tell you the truth , This doesn't bother me as much as --Always having maintained an excellent credit rating and watching as ANYONE got mortgage loans ,multiple new car loans , credit cards , during the ninties and two thousand ought's ! Lets face it housing , credit , and the big bust in the market was the fault of over extending credit to those undeserving ! People who just walked away from debt like it was the right thing to do AND STILL weredit to have to pay interest able to get new loans . I came up in an age when building ones credit rating really mattered . What a scam on those of good credit who had and have to subsidize those who cared less !
I agree the bubble was what caused the wholesale devastation to the housing market but what is even more disturbing is the loss of jobs which were a chief employment factor in the economy. With this trend it will be a very long time before the housing industry will come back. We charged too much for the houses and were willing to finance them with equally too much and no equity to show for it. It is true there is still responsible efforts made by people such as yourself but you cannot divorce yourself form the underlying ramifications of the bubble bursting.
I bought a property last year and was offered 2-3 times more mortgage than I could realistically service. I didn't see much reluctance at all. Fortunately I know how to not bite off more debt than I can manage. But it left me with the impression that the banks are more than ready to make the same mistakes all over again.
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