Drop in housing prices: Crisis or Blessing?
George Will: Alice in Housing Land
Excerpt:
One symptom of the "crisis" is that housing prices have fallen. How far is unclear. Estimates range from 3 percent to 13 percent. Questions arise.
Do young couples struggling to purchase their first homes concur with the sudden consensus that the decline in prices is a national misfortune? The Economist reports: "Monthly payments on a typical house with a 30-year mortgage and 20 percent downpayment were 18.5 percent of the median family's income in February, down from almost 26 percent at the peak — and close to the historical average."
By this measure of housing affordability, the "crisis" is welcome.
Comment: He also touches briefly on Global Warming:
Although Earth's temperature has risen and fallen through many millennia, the temperature was exactly right when, in the 1960s, Al Gore became interested in the subject.
Yes, I drop in housing prices can definitely be a blessing.
ReplyDeleteI used to mention this once in awhile over at another site (which shall remain nameless), but no one seemed to care too much, but I still am concerned about oil and the effects it will have on our economy. Maybe I'm just too much of a pessimist and I need to lighten up. I wonder if people will start to finally notice that oil prices really do matter. What good does it do if housing prices are down if everything else is up?
There are some interesting comments being made by others recently:
"JPMorgan Chase & Co will begin trading physical oil by year-end, increasing its exposure in a market that could rise to $200 a barrel, the bank’s global head of commodities said on Wednesday," reports Reuters.
"The bank plans to expand in commodities and energy trading, Blythe Masters said, despite expectations of job cuts in other areas as it prepares to take on staff from Bear Stearns at the same time it deals with turbulent financial markets."
"Oil rising to $200? It could happen. This year? You could see it, although it would take a further shock to expectations," Masters said.
"In a related story, Bank of England Governor Mervyn King warned that families should expect "a sharp fall in living standards" as rising food prices and inflation squeeze whatever disposable income Britons have left in the wake of crippling debts and a housing market in crisis.
A report by Goldman Sachs Group Inc. earlier this month forecasted that oil prices will reach $150 to $200 dollars a barrel within 2 years"
No, I don't want to be all "doom and gloom" and frumpy about everything. That's just negative and depressing! I hope things don't get too bad. But on the other hand, in my opinion it's good to be aware of what's going on and realize that maybe things could get a bit difficult.
And guess what the news is today, just a few minutes after my latest post? Once again it's "Oil reaches new record high today."
ReplyDeleteSoon we will all be driving Smart Fortwos.
ReplyDelete