http://www.nytimes.com/2008/08/09/bu...pagewanted=all

Calculating Where Home Prices Will Land

A superbly well researched article. Another great one from NY times.

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On Wed, 22 Oct 2008 23:06:09 -0500, Ignoramus32289
wrote:

http://www.nytimes.com/2008/08/09/bu...pagewanted=all

Calculating Where Home Prices Will Land

A superbly well researched article. Another great one from NY times.
==========
Thanks for the heads up.

Problem is that you can cherry pick most any value you like.

The long term rule of 2 to 2_1/2 X household earnings for the
maximum house price, with [downward] adjustments for other debts
such as automobile, student loan and credit card, still seems to
be valid.

As I indicated in another post, examination of the available MSA
[metro statistical area] data indicates that in many areas,
mainly the bubble areas, a household would still have to be in
the top 8th and in many cases the top 9th income deciles [top 20%
and top 10%] of the region to afford even the median [1/2 sell
for more, 1/2 sell for less] priced home.

As John and Ed have pointed out, when you have a consumer based
economy, it is very foolish to cut the individual and family
disposable real income, particularly when the consumers are
already borrowed to the hilt, whether by lowering wages, cutting
benefits or raising taxes and interest rates.


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).