Housing Credit crunch OR Housing valuations?
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The media seems to pick up this "credit crunch" phrase as a way of summing up the downturn in many housing markets. In my view "valuation problem" would more acurately describes the situation.
I'm not pretending to be a genius, but I think this is simple. In the long-term (think decades) homes prices must average a ratio to medium household income; when this get's out of whack, it just has to come back to norm. Easy credit may be the cause, but "lack of credit" is not the problem. Investors make reasonable calculations when making loans, if they don't,,, well, they learn quick not to be a sucker. Anyway would you agree "housing valuation" should trump news headlines in regard to the housing market, not "credit crunch"?
Thoughtful replies apreciated.
Housing Credit crunch OR Housing valuations?great article in yesterday's online Fortune edition. [see link below]
article related prices to rents and historical averages of rent to price relationship. doesn't go so far as consumer income, and I've seen research which suggests that long term housing prices [and rents] are function of consumer income and government caused scarcity [think SFO and NYC].
some obvious adjustments come to mind -- jump in hurricane related risk (cost) in eastern coastal areas due to multi-year cycle in hurricanes, etc. [wildfires in SoCal?? maybe] [global warming?? NO].
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