Most buyers only reference that monthly payment to assess affordability so leverage is the reason a house can cost so much. In some states, California is a prime example, immigration keeps the housing supply a little tight in some areas and that raises prices...
are you sure about those facts? The links provided are kind of cumbersome so I didn't see.. On TV they say avg income in USA is 49k and avg house is 160k, so that's not too far off from 1970. And I don't know if avg house is based on appraisal or sale price which could be quite a difference. Not arguing with you that something went wrong, but maybe not as wrong as your facts would indicate.
Contrary to a popular myth, housing prices adjusted for inflation remain relatively flat. For example, from 1890 until 2000, the prices rose ~20%. Today the prices are ~20% above the historical mean. During the Great Depression, they were 30% below the mean. IMO, housing prices will continue to decline in real terms.
when I bought my house I ran the numbers up one side and down the other and discovered that moneywise, renting was about the same as owning. The only variable was the price of housing. If it went up buying was a little better, and if it went down renting came out a slight winner. So really for me it was a lifestyle decision not a money decision. So when they talk about falling home prices on tv they are all complaining about it because they already own. But what about the poor guy who is trying to buy? Aren't falling prices good for him? Unless you are dealing in apartments or business realty, I don't see how anyone can call a single family house an investment. It's just a place to live.
for that matter, you could say the same thing about the stock market. Don't falling prices make for a better opportunity for those who are out and want to get in? Use to piss the hell out of me when I was short and they would say, "WOW, What a good day it was for the stock market." At least if you are going to talk about housing explain if you are talking from a buyers or sellers point of view.
oldtime, I think they view it as a negative thing because falling housing prices indicate low demand and therefore a bad economy.
There was a time when consumers had to purchase their big ticket items through "Lay-away" ... $20 or $40 bucks at a clip. now even the poor have $100 kicks and $500 ipads... peace Leverage makes it rain...