TraderMark

Whitney Tilson: The Housing Market Is Still in Trouble

Homes are far more affordable then they were 3 years ago 0- I agree. I posted in late 07 where I thought national home prices owuld be (the link is in many of my other posts) and we are at the upper band.

However prices are being artificially inflated still... I don't know if its 10% or more... but yes it won't be another 30-40% drop from here so the worst is behind us. However those expecting a return back to the good ole days have not lived through a bubble. NASDAQ stocks still at a fraction of peak... housing prices need a whole new class of suckers.... plus households to fill the nearly 19 million empty homes.

When mortgages get back to 6% on a 30 year and the government stops handing out my money so others can buy homes, let's see where prices are. I still think CA prices make no sense and people rushing in now are like NASDAQ investors in late 2001.


On Nov 06 07:03 AM Marty Boardman wrote:

> From the real estate investor perspective this report is welcome
> news. Only 10% more in declines to go before we reach bottom? Excellent.
> Whether buying one property or a portfolio a simple strategy would
> be to create an additional 10% margin of safety when putting the
> deal together.
>
> Study these charts and graphs until your eyeballs pop out. The bottom
> line is residential real estate is affordable again. For example,
> in many suburban areas of Phoenix the median price for a home is
> under $100,000. A family with a household income of $40,000 can
> easily afford the $775 PITI. Even if interest rates went above 8%
> this home would still be affordable.