Housing Affordability – Best EVER!

May 31, 2013

Housing affordability. From the data, homes are more affordable than ever these days. As the cost has come down and incomes remain somewhat stable, the ZIRP (Zero Interest Rate Policy) of the Fed is allowing for more people to “enjoy” home ownership.

The chart below provides a glimpse into the historical range of “affordability” using a couple of different metrics. Note that there is also an axis that gives an indication when renting or owning Read more

Housing Recovery or Another 20% DOWN?

June 16, 2009

This is not encouraging at all. If the housing sector is supposed to lead us out of this mess, then we better start making some alternative plans as Robert Shiller is looking for additional downside to housing prices. And note, these are not insignificant drops that will be quickly reversed.

See the chart below to get a glimpse into what it will look like if we follow the Japan real estate market, from top to bottom.

More economic data is is due this week on the housing market that will help to clarify the direction.

(Click to enlarge)



The Flawed Housing Bill – How we will pay

August 22, 2008

Danger Will Robinson…. Warning..Warning….Stay off the Road!

Recently, after I reviewed and wrote about the recent passage of the Housing Bill, I began to look at it more closely.  I spoke with a few colleagues to try to understand what seemed to me to be a flawed plan. They agreed that something was afoul. Either the plan was rushed in order to get something on the books or some concessions were made to provide a benefit to a few of the financial firms that have been getting clobbered.

The truth is that I am disgusted with this plan as it has become a game where the winners have been predetermined – and we all know that they are not going to include you or me.  Just the other day, in my quest to provide an easy and adequate answer to what is going on I tried to explain my thoughts to a client using metaphors.

I explained that what has been going on in the financial sector is can be somewhat compared to a time when you were driving down a straight road. Foot after foot, mile after mile, you drive flawlessly. When you are directed to accelerate, you speed up. When at a stop sign, you stop. Yield, turn, accelerate, stop, put your blinker on, pass a car, look left and right and continue on your way. All is fine with your driving. Then, you realize that the road you are on doesn’t actually exist. Panic sets in and then you see that it is there again, like it never left. So, you continue on your way with a scant remembrance of the bizarre occurrence.

When you pull into town and explain what happened, the Mayor tells you that they know that this is something that occurs, but they always fix it immediately to make sure no one gets hurt. So, you drive on. A few miles later the same thing happens. This time though, it last longer and is much scarier. Again and again, the same sequence of events unfolds and each time the road disappears, you get a Mayoral promise and so on… Read more

Money Girl – Mortgage Short Sales

May 28, 2008

In this edition of Money Girl, I will be discussing a term that unfortunately, many of us will need to know…. mortgage short sales.

Here is the excerpt from the episode…

Having trouble making your mortgage payments or know someone who is? Close to foreclosure but hope to avoid it and looking for another way out?

Well, you are not alone. Today with the housing market plunge, a slowing economy, gas at $4 a gallon and massive job layoffs, many people are on the brink of losing their homes. Every day, hundreds of honest, hard working people who have always paid their bills on time and were living the American Dream decide to just pack up and walk away. The proof is in…

Read/Listen to the rest of this episode

Rock Bottom Housing Prices or Simply Math Gone Wild

May 20, 2008

OK, I have a question… (seriously) The idea that home prices are now at “rock-bottom” prices has been floating around lately. How is the NAHB coming up with their conclusions? In particular, do they include the sales price of short-sales? How about foreclosures?

If so, then is the average price really as low as it is going to go? If you can provide the details, I would be most appreciative.

From CNN.com:

Housing affordability best in four years – May. 20, 2008

As a result, 53.8% of all new and existing homes sold nationwide during the first three months of 2008 were affordable to families earning the median household income of $61,500, according to the latest Housing Opportunity Index released Tuesday by Wells Fargo and the National Association of Home Builders (NAHB).

That’s up from 44% during the first three months of 2007 with home prices the most affordable they’ve been since the three month period that ended June 30, 2004.

“Three factors combined to substantially increase housing affordability,” said NAHB president, Sandy Dunn, in a press release accompanying the report. “Mortgage rates returning to near the record low levels of a few years ago, a $2,500 rise in family income nationwide (from 2007 to 2008) and lower house prices…

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