Wednesday, May 11, 2005

High Home Prices Can Hurt

Housing inflation is going mainstream. USAToday's cover story was "Bubble or not, high home prices can hurt." There are good numbers in here, like "a typical existing home costs 3.5 times a median family income, compared with a longstanding 2.7 ratio."

And speculative buying and investment buying: "Home builders are trying to tamp down speculative buying by writing contract clauses allowing them to cancel a sale...."

"Based on past experience, ARMs should have only about 20% of market share." They have more than 33% of the market.

Article even uses the phrase: "real-estate-price inflation." This is a quote from Eric Wolfe of IBEW noting working migrating to affordable areas. Like I've been saying, where are the workers going to live? How are the jobs going to be filled?

There is no doubt that we are in scary economic times.

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