DNR: Death & Evolution, Not Taxes
Hot off the press from a Naybob of Realty...
From IHS...
Prices and are now 6.5% below their 2007 peak. When weighted by market value...
the nation is 3.8% undervalued; when weighted by housing units, it is 5.7% undervalued.
According to the third-quarter analysis, extreme overvaluation is now “essentially nonexistent”
- only three metro areas met the definition of extreme overvaluation, down from a peak of 52 metro areas in 2005.
From CEPR...
the Center for Economic and Policy Research (CEPR) offers a straightforward solution to the turmoil in the housing market: let the prices fall.
house prices used in mortgage appraisals should be based on rental values to avoid over-valuation.
The fact that real house prices exploded by 80% from 1996 to 2006 while rents increased by only 4% over the same time period...
points to a degree of speculation and the fact that prices still have further to fall before the bubble deflates.
Prices are still hugely out of line with trend levels in bubble markets.
If Fannie and Freddie no longer supported the purchases of homes at bubble-inflated prices,
there would be a quick price decline of 20 to 30% in the most over-valued markets.
The Nattering One muses... Lies, Damned Lies and Statistics...
What a difference between IHS (based on National City Corp) and CEPR (based on S&P Case Schiller).
Home values are 6.5% off from peak and overvalution is nonexistant?
Its clear to see that IHS have drank the flippers and speculators kool aid and taken one too many bong hits, to the head that is.
Bravo to CEPR, as they have it nailed... this is a reality based theme we have been Nattering all along....
First, everytime I mention the true inflation rate of 14 to 17% in a discussion, some hook in mouth media lemming opines that the CPI says inflation is only 4%...
Proving again that if you tell a big enough lie, enough times, people will believe it.
My standard retort is that Hitler really only wanted Poland, and as anyone paying bills in the real world can tell you, insert a 1 before the number.
The impact of the rental value to wages ratio distortion is severely underestimated, as the inflation calculations used for CPI...
do not consider mortgage payments, they only consider what the property could be rented for.
This gross miscalculation has misguided the media, general public and policy decisions (in particular the Fed) over the last 20 years.
If the true double digit currency debauch had been considered, the Fed never would have lowered,
they would have raised like Volcker did and we would not be in this shit storm.
Secondly, everytime a trailer home gets sucked up a tornado, or a home mudslides down a drenched hill, or burns in another wild fire...
Doesn't it make you wonder? After the 1st, 2nd and umpteenth time, why did these people collect the insurance and rebuild in these locations?
There are two guarantees in life, evolution and death; and two rules: don't mess with Mother Nature and the public should have a DNR order in place.
Rather than artificially propping up market prices, let the markets take their natural course which in this case is to fall...
Do not bail out idiots who paid too much; greedy lenders and other enterprises who have had their heads buried in the sand for decades (automotive).
Supporting these dodos, failures and losers, attempts to delay and pervert the natural scavenging processes of death and evolution.
Said processes clear the path for new blood, better ideas, a clean slate and allow for the necessary evolutionary changes...
allowing for a better foundation suited to the future. The government bailouts have sealed our fate, as we and our childrens children will be taxed to death.
Rather than a fresh start, we are doomed to be mired in a rickety house of cards built on...
an unstable foundation consisting of the carcasses of failed legacies that should have been allowed to die a natural death, rather than being resuscitated.
From IHS...
Prices and are now 6.5% below their 2007 peak. When weighted by market value...
the nation is 3.8% undervalued; when weighted by housing units, it is 5.7% undervalued.
According to the third-quarter analysis, extreme overvaluation is now “essentially nonexistent”
- only three metro areas met the definition of extreme overvaluation, down from a peak of 52 metro areas in 2005.
From CEPR...
the Center for Economic and Policy Research (CEPR) offers a straightforward solution to the turmoil in the housing market: let the prices fall.
house prices used in mortgage appraisals should be based on rental values to avoid over-valuation.
The fact that real house prices exploded by 80% from 1996 to 2006 while rents increased by only 4% over the same time period...
points to a degree of speculation and the fact that prices still have further to fall before the bubble deflates.
Prices are still hugely out of line with trend levels in bubble markets.
If Fannie and Freddie no longer supported the purchases of homes at bubble-inflated prices,
there would be a quick price decline of 20 to 30% in the most over-valued markets.
The Nattering One muses... Lies, Damned Lies and Statistics...
What a difference between IHS (based on National City Corp) and CEPR (based on S&P Case Schiller).
Home values are 6.5% off from peak and overvalution is nonexistant?
Its clear to see that IHS have drank the flippers and speculators kool aid and taken one too many bong hits, to the head that is.
Bravo to CEPR, as they have it nailed... this is a reality based theme we have been Nattering all along....
First, everytime I mention the true inflation rate of 14 to 17% in a discussion, some hook in mouth media lemming opines that the CPI says inflation is only 4%...
Proving again that if you tell a big enough lie, enough times, people will believe it.
My standard retort is that Hitler really only wanted Poland, and as anyone paying bills in the real world can tell you, insert a 1 before the number.
The impact of the rental value to wages ratio distortion is severely underestimated, as the inflation calculations used for CPI...
do not consider mortgage payments, they only consider what the property could be rented for.
This gross miscalculation has misguided the media, general public and policy decisions (in particular the Fed) over the last 20 years.
If the true double digit currency debauch had been considered, the Fed never would have lowered,
they would have raised like Volcker did and we would not be in this shit storm.
Secondly, everytime a trailer home gets sucked up a tornado, or a home mudslides down a drenched hill, or burns in another wild fire...
Doesn't it make you wonder? After the 1st, 2nd and umpteenth time, why did these people collect the insurance and rebuild in these locations?
There are two guarantees in life, evolution and death; and two rules: don't mess with Mother Nature and the public should have a DNR order in place.
Rather than artificially propping up market prices, let the markets take their natural course which in this case is to fall...
Do not bail out idiots who paid too much; greedy lenders and other enterprises who have had their heads buried in the sand for decades (automotive).
Supporting these dodos, failures and losers, attempts to delay and pervert the natural scavenging processes of death and evolution.
Said processes clear the path for new blood, better ideas, a clean slate and allow for the necessary evolutionary changes...
allowing for a better foundation suited to the future. The government bailouts have sealed our fate, as we and our childrens children will be taxed to death.
Rather than a fresh start, we are doomed to be mired in a rickety house of cards built on...
an unstable foundation consisting of the carcasses of failed legacies that should have been allowed to die a natural death, rather than being resuscitated.
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