westwest888

Ten Comments on Housing

15% is a complete and total pipe dream, even for nationwide prices. I could see it falling 15% per year for two or three years for close to a 40% drop, then leveling off to a rate of home price appreciation that doesn't keep up with inflation. Any place where a starter home is approaching $500,000 is going to see a 50% haircut guaranteed. Until the manager of Pizza Hut can buy a house in David Merkel's zip code with a 30 year fixed DTI 36% and 20% down, it's too expensive.

Think about people born after 1978 who are unlikely to be current homeowners because they were in school and finding a spouse. These people are the foundation of buyers as the nation's housing stock increases in size. Until it is fiscally possible for 80% of them to buy with a legitimate mortgage product, the crisis has no end in sight. Even when they can buy, who's going to want to when the social mood is so sour? Real estate is going to be about a popular as YHOO in 2001. Contrarians will be buying real estate. Real people will run for the hills.

2015 is an optimistic time for 12 months of continuous year over year home price increases that outpace inflation.