bostonbubble.com Forum Index bostonbubble.com
Boston Bubble - Boston Real Estate Analysis
 
 FAQFAQ   SearchSearch   MemberlistMemberlist   UsergroupsUsergroups   RegisterRegister 
 ProfileProfile   Log in to check your private messagesLog in to check your private messages   Log inLog in 

 
Go to: Boston real estate bubble fact list with references
More Boston Bubble News...
DISCLAIMER: The information provided on this website and in the associated forums comes with ABSOLUTELY NO WARRANTY, expressed or implied. You assume all risk for your own use of the information provided as the accuracy of the information is in no way guaranteed. As always, cross check information that you would deem useful against multiple, reliable, independent resources. The opinions expressed belong to the individual authors and not necessarily to other parties.

The Economist: How to fix housing

 
Post new topic   Reply to topic    bostonbubble.com Forum Index -> News & Reference Suggestions
View previous topic :: View next topic  
Author Message
news



Joined: 14 Jul 2007
Posts: 0
Location: Greater Boston

PostPosted: Fri Oct 22, 2010 6:59 pm GMT    Post subject: The Economist: How to fix housing Reply with quote

Use this forum thread to discuss the following link.

Description: The Economist: How to fix housing
URL: http://www.economist.com/node/17308991
Info/Broken?: http://www.bostonbubble.com/link_info.php?id=3237

Subscribe to New Links: RSS Feed
Suggest a Link: New Topic
Back to top
View user's profile Send private message Visit poster's website
balor123



Joined: 08 Mar 2008
Posts: 1204

PostPosted: Fri Oct 22, 2010 10:07 pm GMT    Post subject: Reply with quote

Quote:
@Wcade, The issue I see is that as more homes are foreclosed on property prices drop. This impacts all the people who own homes in the area, and can lead to a cascading effect. I would like to see this paper provide an assessment of the potential cost to the public if home prices drop compared to the cost of directly funding a "bailout".


I've never understood this argument. Certainly the prices of homes in some neighborhoods drop when there are lots of foreclosures but that's a micro view. At the macro, consumers are still spending a lot on housing so it stands to reason that this is actually just a problem for those homeowners, not the housing market as a whole. The impact of "fixing" this problem is that many other neighborhoods which were getting those turned off customers will receive less of them so it just results in a more equal distribution of housing losses, not a reduction in them.

Quote:

@JohnLT, falling prices may be a cost to sellers, but they are a benefit to buyers. Your hypothetical loss of $15,000 in equity would also be a $15,000 gain for the corresponding buyer. Lower prices are a good thing for first time buyers, for your children, for your children's children, and so on. Higher prices only help existing owners. In other words, lower prices benefit many more people than higher prices.


I love this comment.

I think I can summarize the Economist viewpoint of: "Money was made and someone has to pay for it. We propose that the government should." Of course, they make no mention of where the government is supposed to get the money from. It seems, though, that either way young people and their children will be left holding that hot potato.
Back to top
View user's profile Send private message Send e-mail
admin
Site Admin


Joined: 14 Jul 2005
Posts: 1807
Location: Greater Boston

PostPosted: Fri Oct 22, 2010 10:28 pm GMT    Post subject: Reply with quote

balor123 wrote:

I love this comment.


Thanks, you have good taste Smile

- admin
Back to top
View user's profile Send private message Send e-mail Visit poster's website
balor123



Joined: 08 Mar 2008
Posts: 1204

PostPosted: Sat Oct 23, 2010 1:39 pm GMT    Post subject: Reply with quote

As much as people reference each other, for the most part I think people just use them to vent.

On a slightly related note, I'm still waiting for Southpark to create a foreclosuregate episode. The securitization one was just great. I'm thinking they could start with those guys who keep saying "They took my job" and replace job with "house".
Back to top
View user's profile Send private message Send e-mail
CL
Guest





PostPosted: Mon Oct 25, 2010 11:51 am GMT    Post subject: Reply with quote

My 2 cents -

1. Lower price is good for first time home buyer but not for existing homeowner. Democractic society will lean its opinion and policy towards to the majority (voting) group, which for now is homeowner not first time buyer. It's just as simple as that.

2. I think it's rather silly to drag the children into the argument coz, you see, seller has children too. In fact, since there are more homeowner than first-time buyer, it stands to reason that there are more children that will be benefit from raising home price than a sea of foreclosure. Lower price may help buyers, buyers children, new family etc to get a cheap house, but it can also bankrupt a seller family and dash their kids' college dream into pieces. Just want to highlight the flipside.

3.
Back to top
admin
Site Admin


Joined: 14 Jul 2005
Posts: 1807
Location: Greater Boston

PostPosted: Mon Oct 25, 2010 1:54 pm GMT    Post subject: Reply with quote

CL wrote:
My 2 cents -

1. Lower price is good for first time home buyer but not for existing homeowner. Democractic society will lean its opinion and policy towards to the majority (voting) group, which for now is homeowner not first time buyer. It's just as simple as that.


I'm not disputing that. Tyranny of the majority does seem to be the norm.

CL wrote:

2. I think it's rather silly to drag the children into the argument coz, you see, seller has children too. In fact, since there are more homeowner than first-time buyer, it stands to reason that there are more children that will be benefit from raising home price than a sea of foreclosure. Lower price may help buyers, buyers children, new family etc to get a cheap house, but it can also bankrupt a seller family and dash their kids' college dream into pieces. Just want to highlight the flipside.


I'd think that lower prices would do more to help sellers' children as well because they would also benefit from more affordable housing. Maybe higher prices would lead to a higher inheritance, but that lesser benefit would be diluted with multiple children, estate taxes, and the tendency to need to wait an extended period of time for the benefit. Lower prices would be directly beneficial to them if they were to buy on their own.

- admin
Back to top
View user's profile Send private message Send e-mail Visit poster's website
balor123



Joined: 08 Mar 2008
Posts: 1204

PostPosted: Tue Oct 26, 2010 2:22 pm GMT    Post subject: Reply with quote

I think admin was referring not to the direct children of homeowners but all children for all time. Either at some point we allow housing to correct and all our children get affordable high quality housing or we kick the can down the road to them and let them sort it out. What was the population of the US 50yrs ago? 100 yrs ago? You get the point. The problem gets more expensive with time but the baby boomers are among the most selfish generation in US history IMO and I think you are right - they're going to try hard to pass the problem on.

As for college dreams, I don't see how anyone is going to be able to afford college soon but even if maintaining current housing prices could solve the problem, there's not a big difference between making children taking on a huge loan for college vs one for housing.

America is bleeding jobs due to it's high cost of living and the cost of housing is I would imagine highest up on the list of factors that affect American competitiveness. Other big factors include healthcare and minimum wage laws and restricted immigration. That's what separates us from China and India and what's been killing Europe for centuries.
Back to top
View user's profile Send private message Send e-mail
Display posts from previous:   
Post new topic   Reply to topic    bostonbubble.com Forum Index -> News & Reference Suggestions All times are GMT
Page 1 of 1

 
Jump to:  
You can post new topics in this forum
You can reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum


Forum posts are owned by the original posters.
Forum boards are Copyright 2005 - present, bostonbubble.com.
Privacy policy in effect.
Powered by phpBB © 2001, 2005 phpBB Group