Sing Expat

NAR's Lawrence Yun Continues to Mislead on Housing

Awesome give and take. I agree with everyone! Heh heh.

Let's ignore emotional arguments and patriotic justifications for the market doing this or that. Look at economics.

House prices are historically high versus income. So, unless someone can prove there is a new paradigm and not a bubble, prices must drop until they are in line with historical norms. Historically, median price is about 3 times median wage, meaning that the median price should return to about $140,000.

I would also argue that we are in severe housing crisis with massive oversupply and "buyers" without any savings. Low Fed funds rates are not showing up in mortgages; the low rates are in fact designed simply to restore profits to the banks (yield curve). Boomer Babies have no money to make downpayments. Prices are rocketing up while wages are stagnant.

Are there market segments and geographic locations which are "immune"? No doubt, but even the top end is getting slammed in some places. And the NAR chestnut about location, specifically someone mentioned Southern California, is a joke. Look at house prices in SoCal, Vegas, and Florida. Death spiral! And NYC? Sure, all the foreigners will save NY real estate. As Borat says, "Not!"

Frankly, house prices should be lower. It's better for everyone. Lower taxes, lower insurance, cheaper to buy. Who cares if you sell and move on? Your next home will be cheaper still.

Is there anyone dumb enough to suggest that free housing would be bad? Would you turn down Bill Gates if he offered you his house for free because houses SHOULD be expensive?