businessinsider.com — Below is the Robert Shiller chart that makes this crystal clear (produced by the New York Times and taken from this excellent article by James Quinn). And below the chart is what James Quinn thinks about it.
Feb 22, 2009 View in Crawl 4
jdoorjamFeb 23, 2009
That's part of the reason everything was so damn "roaring" in the 20s. Everything from toasters to townhouses was cheap... except then everything got too cheap as production exceeded demand, the bottom fell out, and we had the Great Depression.
Closed AccountFeb 24, 2009
It would have been nearly impossible for Bush to have repealed/reformed the CRA, or any other president for that matter. It's much easier to enact new legislation than it is to repeal it, especially if repealing that legislation can be construed as anti-poor. Just look at all the "temporary" taxes and programs which FDR enacted that we're still living with today. Or tool roads.
Closed AccountFeb 24, 2009
Anyone with half a f**king brain could see that a correction was long overdue. That effect gets multiplied in California because of insanely expensive housing. It'd be one thing if these people could admit defeat and count their losses, but of course they can't. They want the government to artificially prop up the value of their homes, which hurts everyone who 1. isn't a f**king moron when it comes to finances and 2. wants to become a new homeowner.Seriously, f**k them. Had they not bought in at the worst f**king time, demand would not have peaked.
prosequiFeb 24, 2009
Ah - but the graph is adjusted for inflation.... there is a fairly good chance that inflation is going to go on a tear in the near future. Money tied up in a house should be protected from inflation. Assume you lost 20% of the value of your home in the last year - inflation could easily overcome 20% in 3-4 years. Since most people live in a home longer than that there should be no problem given the current race to inflate going on around the world.
maliathFeb 25, 2009
Obviously Texas doesn't have it as bad as California, that doesn't mean that housing isn't over-valued in Texas and that cities in Texas are not struggling with the housing crisis.
Closed AccountFeb 25, 2009
Illuminating.And it makes perfect sense! I mean, how much do we think we SHOULD be paying for a home? Why should we pay more now than 100 years ago, adjusting for inflation? Homes are a necessity, not an investment, and if the price of homes goes higher than our means to pay for them, we stop buying them, which is exactly what's happened. So in order for us to buy them again, the prices must come down.The question is, how did that boom occur? why did we start buying at such high prices? The answer is that the banking industry became very "flexible" in their calculations of what they thought we could afford, so if we suddenly can get twice the mortgage we could before, that means that more money is being pumped into the housing market (more demand to buy bigger houses), and the prices sky-rocket.But every rocket eventually falls out of orbit and crashes back to earth. Too bad it gets so damaged on the way down.
Closed AccountMar 18, 2009
I prefer a solution that gives homeowners something to lose if they choose to screw over their neighbor's home values and walk away from their mortgage.Specifically, there's too many people with no equity that have "nothing to lose".Somebody on TV proposed giving all homeowners 20% equity by replacing up to 20% of their mortgage with a private loan with a very attractive rate. After the private loan is issued, the homeowner would be blocked from pulling their 20% equity stake back out of their home. If they decide to walk away from their mortgage, they would still be stuck with the private loan. Homeowners would think twice about screwing over their neighbors.