Wow, so people in Japan have two different life to pay for one house if they want to own that house. The first buyer will not own, but the children of that buyer are force to take the loan? I would rent if I was living in Japan.
well, they've already with stretching payments and modifying some have made 30 year's, 40...why not say you can do 50 or 60?
These malls are empty for a reason. Go to a food store and most of the foods are heavily processed garbage. Stores that do serve good foods (not necessarily organic) are very expensive. Most of the other stuff can be bought at 25% of store cost online, like old model electronics and clearance items. Large stores sell Furniture at 50% price of the small furniture stores. Entertainment is online now, so there go the video stores. Go to restaurants and spend $15 per person on food or cook the same food at $1 per person in the home. Go to movies and spend $50 with soda and pop corn or rent a movie from a vending machine for a dollar along with that 25 cents soda and pop corn. Unfortunately, most jobs exist directly or indirectly due to these inflated consumer expenses. If the large middle class spending collapses, a lot of jobs collapse and there will not be enough money left to pay the lawyers, doctors and real estate taxes. Even if one is locked on a 30 year loan, there is a big risk of the real estate taxes going sky high in the name of public school education.
Not that I disagree with your point, but the specifics are a little different I think. You can assume the median income for a family serious about purchasing a house is higher than just the median of all people. According to the US Census website the average income of households with two earners is about 75,600. If we take a guesstimate of say $60k household income for potential homebuyers and use the old formula of 20% down and 2.5 times your income to loan size we get an average house price of $187,500.
Let me correct that statement. CONSERVATIVEs, regardless of which country they rule, WILL screw the people. It's a genetic abnormality. The type of mentality that is paranoid about getting invaded and attacked, by default is wired to screw people. If you're not a conservative and ever done business in the bible belt you'll know what I am alluding to. In Japan they finally had it and kicked them out http://hosted.ap.org/dynamic/stories/A/AS_JAPAN_POLITICS?SITE=NJMOR&SECTION=HOME&TEMPLATE=DEFAULT In Mexico the conservatives would have lost with higher margins. But the voting machines were tampered with . The Europeans led the trend. Now it's taking on everywhere else.
Everything seeks a balance and I'm hoping this will overshoot then rebalance.* It's going to hurt and some won't survive, many will be permanently scarred, but as a whole, we'll emerge intact. This isn't the option I would have chosen, but it is, what it is. *Contingent upon major events such as natural disaster, terrorist attack, etc. If so the time factor changes and once again sweeping governmental policies will be put into place.
If we are just looking at averages it should be average income vs average home price. It should be darn close to 2.5 x avg household income. I still believe the average home price is over inflated. I don't have a "dog in the fight", I am not seeking to sell my home & am not worried about the value. My home is a place to live in, not an investment. (paid for too ) The fact of the matter is wages have NOT been pacing real estate in growth. Now that the exotic financing options are gone maintaining the average home value at its current level is unrealistic. Just look at the required down payment of 20% in your example of 187,500- (37,500). How long would it take a couple making 60k to come up with 37.5k? Now the Realtors are arguing that foreclosure sales shouldn't included in appraisals. I can't agree with that logic. Any sale of comparable properties should be used regardless of circumstances. I'm afraid real estate still has some downside.
Not just that, I have talked to some recently that told me that you shouldnât look at any âdistressedâ sales for comparison. Sure that makes perfect sense to me, I think I will change my stock charts to clear out any down candles since those must have been distressed sales that donât count. Like I said, I agree with you in principle I just thought I would give another side of it.
LOL- I would make a killing trading index options if I could "cull" the undesirable stocks out of the index! They just want to keep the bubble inflated. I understand what you are saying, just think there is a little more downside to R.E. prices.