Article

2009-10-17 Economy

Doubling Down On the Wrong Housing Policy - Here we go again?

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Posted by GolfBravoUSMC 2009-10-17 10:16|| || Front Page|| [9 views ] Top

#1 I hope I'm getting through to people when I say that LOW house affordability (i.e av prices to av wages) is NOT a good thing for an economy. Especially when it's achieved by a massive credit supply increase.

Posted by Bright Pebbles 2009-10-17 10:32|| 2009-10-17 10:32|| Front Page Top

#2 Low prices are always a good thing for an economy.

In this case subsidizing housing affordability is a subsidy to property developers.

Posted by phil_b 2009-10-17 12:01|| 2009-10-17 12:01|| Front Page Top

#3 If I were in charge, and knew the application to be as true as possible, I would not have approved a loan to someone where the payments are above 25%, nevermind 50%. Government sponsered irresponsibility and indentured servitude.

Posted by swksvolFF 2009-10-17 12:26|| 2009-10-17 12:26|| Front Page Top

#4 Subsidising housing has only one effect, to raise prices (and doubly lower affordability, from higher taxes on wages AND higher prices for shelter).

Posted by Bright Pebbles 2009-10-17 12:44|| 2009-10-17 12:44|| Front Page Top

#5 I didn't make myself clear. Subsidizing housing affordability merely drives up prices. Which is always a bad thing for the economy.

Posted by phil_b 2009-10-17 21:30|| 2009-10-17 21:30|| Front Page Top

#6 ...Well, FWIW, I'm in the process of buying a home right now (supposed to close 11/16). This has been our experience so far, let me give you a little background:

*Had a bankruptcy (discharged) 4 years ago
*Have only been in my current job 15 months (Am getting a VA loan, however, and that can trump a lot of problems)
*House is 50 years old - 3B, 2 BA built at 900 sq ft,, 1/4 acre corner lot gutted to the exterior walls and rebuilt to 1300 sq ft from May - Sept of this year
*In a pretty-much-okay neighborhood
*Priced a little high compared to other homes in the same neighborhood, but we were able to argue them down about 20%, price in the very low six figures

Our bank (one of the VERY big Government-run zombies) has been tripping all over itself to get us a loan, and everybody has been willing to do anything to get us this house. And I'd say at least a third of the places we looked at were foreclosures or almost there. The most interesting thing I've found out so far is that in our price range ($95-$120K) houses are selling like hotcakes...but the contractors in the area are basically refusing to build anything in that price range, instead insisting on building townhouses and McMansions in the $250K and up range. These places are going empty, or in the worst cases being abandoned unfinished by the contractors.

Mike

Posted by Mike Kozlowski 2009-10-17 22:02|| 2009-10-17 22:02|| Front Page Top

#7 Interesting perspective, Mike. Early congratulations!

Posted by trailing wife 2009-10-17 23:04|| 2009-10-17 23:04|| Front Page Top

#8 the contractors in the area are basically refusing to build anything in that price range, instead insisting on building townhouses and McMansions in the $250K and up range. Either that's an opportunity for other contractors to set up business or something important has been left out of the equation.

Posted by Anguper Hupomosing9418 2009-10-17 23:17|| 2009-10-17 23:17|| Front Page Top

23:46 gromky
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23:04 trailing wife
22:31 Cornsilk Blondie
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22:05 Mike Kozlowski
22:04 Skunky Glins****
22:02 Mike Kozlowski
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