Real Estate Downturn
…at least this is what a recent Businessweek article is writing. Some more from the article:
State and local governments were flush with tax revenue during the five-year housing boom. They pulled from bulging pools of property, income, and sales tax to expand education, law enforcement, health care, and infrastructure programs without needing to burden residents and corporations with tax hikes. (more…)
Another list of potential places to invest in:
http://images.businessweek.com/ss/08/04/0418_housing/index_01.htm?chan=rss_topSlideShows_ssi_5
The slide show argues some markets have seen as much as a 40% drop in home prices and so it’s wise to get in. A friend of mine in the business says “business is picking up” probably due to the drop.
Cities listed are Sacramento, Phoenix, Los Angeles, Las Vegas, Atlanta, San Diego, Boston, Miami, Chicago, Seattle, Washington D.C., San Francisco, Houston and Denver.
An article I read recently from the International Herald Tribune. It was titled “Soft landing unlikely for the housing slump” by David Leonhardt of the New York Times. It made so much sense that I’m wondering when the next “opportunity” to buy. Despite all the efforts of the Federal Reserve in the United States, there’s one unescapable fact and it’s something I’ve been preaching to my students: prices of real estate have outpaced incomes. Let’s be frank, but if you don’t have the money to pay for the housing you buy, you simply will have to give it up to foreclosure or sell it to some Joe or Joanna quick enough that they don’t realize they’re going to have the same problem soon. It just took a matter of time before the current Ratio of Median House Price to Median Household Income got too high. It’s at… (more…)
…well, actually not really a loss, but the CEO Tom Kunz had a $1.3 million dollar cash offer for his home in Tuscan Ranch, California in 2004, but turned it down. A home in the same subdivision sold for $1.1 million dollars and is supposedly identical to his home. He says “I could sit here and say, ‘Oh I lost $200,000.’ But I’ve still made about a $700,000 profit,” he said in the interview late last week about the problems facing the housing market.”
(more…)
