US Median House Prices Fall

[Eroberer]

Originally posted by Jon Miller
I take out educational loans to consume more all the time. I Am not as bad as I use to be.. but I would have to live off no money at all if I didn't have educational loans..(I would eat Raman, never go out, etc... )

I would rather ahve fun now, and pay later, than have no fun now.. and haev more money than I need later

JM

I ate poor for 4 years, but I got to go out a lot. I held a 15 hour/week job for 3 years, and came out with only $12k in debt. As long as you think you can get a good job after college and pay back the loans, I think those kinds of loan are fine. I wouldn't suggest racking up $25k in debt just to get an Art major, though. Also, grad school debts just come with the territory.

I guess that's a good example, but I'm still pretty sure that I've heard debt and savings are very bad problems in this country. I'd like to know how much of that is borrowed against the house, though. I'm clueless in those areas.

[Victor Galis]

Well, I really shouldn't be talking. I'm living off my existing money/parental support right now. I'm not exactly living it up, but I could definitely be cutting some corners (like Ice cream!).

Generally when I had an income, I saved significant portions of it. I dream of having enough money to retire off the interest/dividends.

[Victor Galis]

Originally posted by Eroberer


I ate poor for 4 years, but I got to go out a lot. I held a 15 hour/week job for 3 years, and came out with only $12k in debt. As long as you think you can get a good job after college and pay back the loans, I think those kinds of loan are fine. I wouldn't suggest racking up $25k in debt just to get an Art major, though. Also, grad school debts just come with the territory.

I guess that's a good example, but I'm still pretty sure that I've heard debt and savings are very bad problems in this country. I'd like to know how much of that is borrowed against the house, though. I'm clueless in those areas.

I came out of my undergrad with a considerable ammount of money. I decided I needed grad school to whittle it down lol.

[Jon Miller]

Originally posted by Eroberer


I ate poor for 4 years, but I got to go out a lot. I held a 15 hour/week job for 3 years, and came out with only $12k in debt. As long as you think you can get a good job after college and pay back the loans, I think those kinds of loan are fine. I wouldn't suggest racking up $25k in debt just to get an Art major, though. Also, grad school debts just come with the territory.

I guess that's a good example, but I'm still pretty sure that I've heard debt and savings are very bad problems in this country. I'd like to know how much of that is borrowed against the house, though. I'm clueless in those areas.

In college I worked for 10-20 hours a week (Besides a Honors Physics Major and a Math Major). In graduate school, I have had employment the whole time.

I owed 25k after undergrad. I will probably owe a bit over 60k after grad school.

JM

[Jon Miller]

In undergrad I never went out, I spent all my time working, or studying, or doing things that cost no money...

I think I did things wrongly.

In grad school I have been a bit extravagant, I admit. I have spent too much on eating and drinking.. and a few toys. But I went without for a long time.

JM

[:) Smiley]

Originally posted by Victor Galis
I've heard that the average American family's savings rate is -.2%.

It's not so much that the whole system falls apart, but rather that a decrease in consumption causes companies to lay off workers who then also stop consuming, and so on.

I honestly don't know, because the idea of borrowing to consume more is alien to me.

this will be somewhat mitigated by the offshoring of most of our consumer goods manufacturing... retail will still feel pain though.

[Provost Harrison]

Originally posted by Victor Galis
I've heard that the average American family's savings rate is -.2%.

It's not so much that the whole system falls apart, but rather that a decrease in consumption causes companies to lay off workers who then also stop consuming, and so on.

I honestly don't know, because the idea of borrowing to consume more is alien to me.

This is the problem isn't it? By allowing the property prices to become so overinflated it could result in a crash - our governments shouldn't have allowed it to reach this procarious situation...

[Cort Haus]

Originally posted by Provost Harrison
This is the problem isn't it? By allowing the property prices to become so overinflated it could result in a crash - our governments shouldn't have allowed it to reach this procarious situation...

The trouble is that the propertied classes (including policy leaders in govt and media) are all doing very nicely from this hyper-inflation, imo. It encourages investment in buy-to-let rather than in industrial or commercial sectors, making those with property and family money even richer, whilst pushing up prices for the excluded. In short, those in power have much to gain personally from the status quo.

Add to this the near-impossibility of development of much-needed land outside the cities, and you have the roots of the problem.

This group is campaigning for a rational and progressive solution - mass production in construction:

http://www.audacity.org/Welcome.htm

[Colonâ„¢]

The problems with such "house prices are surging because certain interests want it to" theories is that prices have been surging all over the western world. The US, the UK, Spain, the Netherlands, Belgium, Australia... It's kind of curious that in all of those countries have been surging simultaneously and that in every one this would be due to a local cause.

[Cort Haus]

Originally posted by Colonâ„¢
The problems with such "house prices are surging because certain interests want it to" theories is that prices have been surging all over the western world. The US, the UK, Spain, the Netherlands, Belgium, Australia... It's kind of curious that in all of those countries have been surging simultaneously and that in every one this would be due to a local cause.

- and presumably in all those countries the the ruling classes all own property.

[Provost Harrison]

Yeah, it is definitely a global phenomenon...and this information that DanS has given us seems to ring true with my local observation...that the prices of property actually seem to have decreased...I believe that our continued price increases are actually the result of certain areas rather than the country as a whole. And this situation doesn't help those trying to move up either.

Another observation is regarding buying-to-let now - the bottom seems to have fallen out of it. It would cost me more to buy my house via interest-only mortgage as it does to rent!

[Provost Harrison]

The thing is in London that you will notice if you go around is the sheer number of abandoned properties or unused land...it is a shame these aren't being used effectively to provide more property supply.

The other annoying thing are some of the modern building regulations that are in place (thanks to Two (J/Sh)ags) - modern properties are so pokey and I would rather have something a little more sensibly proportioned with a bit of character. I have never understood people pay more for a modern property which is usually more cramped with less character...

[DanS]

Originally posted by Colonâ„¢
The problems with such "house prices are surging because certain interests want it to" theories is that prices have been surging all over the western world. The US, the UK, Spain, the Netherlands, Belgium, Australia... It's kind of curious that in all of those countries have been surging simultaneously and that in every one this would be due to a local cause.

This is not entirely true, at least in the U.S. About half of the country has experienced only modest price increases.

Overall, interest rates have been low in the U.S., which makes these kinds of rises possible.

[KrazyHorse]

Overall, interest rates have been low in the U.S., which makes these kinds of rises possible.

Not really. Lowering interest rates provides a one-time kick, not an ongoing growth impetus.

[Colonâ„¢]

Originally posted by Cort Haus


- and presumably in all those countries the the ruling classes all own property.

So they all decided to gang up on the poorer classes at this particular time? Some coincidence. And why now and not sooner?

This is not entirely true, at least in the U.S. About half of the country has experienced only modest price increases.

Well yeah, if you choose to focus on the below-average parts of the economy, you won't find a boom ever, anywhere.

Overall, interest rates have been low in the U.S., which makes these kinds of rises possible.

They've been low everywhere. Easy credit is the common thread across all these countries.

Also curious that two notable exceptions to the real estate boom are Germany and Japan. Two countries that experienced a real estate crash in a not so distant past.