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Housing Prices

Jenkins

By Jenkins
in Providence

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pete11 Whistle-Stop

pete11

Posted
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Uh how exactly has your gain been realized? The predator analogy is correct, but only if your tracking foreclosures.

Jerry is correct on dellusions about the real estate boom. You ripping apart centuries old metrics of affordability and rent/own, wage to median that boring old stuff, might be your take.

I on the other hand believe that real estate appreciates by inflation+ nominal population growth, or housing would cost more for every subsequent generations.

I really hope this area takes off, its scary over there, but it would really involve displacing a lot of people. So where do those people go?

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pete11 Whistle-Stop

pete11

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try this one on for size...

movement away from premium locations [A+, A, A-]

movement towards B-Cities... [b+, B, B-]

expected surge in housing demand, echo boomer population

its all cycles and providence is in one thats been on an upswing

btw- i want to see about 10-15 tall slender condo or apt towers in central providence locations by 2020. they add great population density and create possibilities for more urban locations

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pete11 Whistle-Stop

pete11

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I don't think it takes displacing as many people as people think. First the 19k number that people throw around, that's not everyone in O'ville, but some would have you think that no one in O'ville makes more than 19k. Even the families that are at 19k or below, a lot of them are that on paper, there's a large black market in immigrant communities, and their are also extended families living in one household pooling resources. Also immigrants live much more on the cheap than the average American. The fact that anyone in America should be living on 19k revolts me, but some people are much better able to swing it.

The bottom rung that TheAnk speaks of is not poor people, it's the people that are actively crappifying the neighborhood. The criminals, the hoodlums, the creeps. There are some good people that will be economically displaced, but the goal is to bring in business to the neighborhood, the city, and the state such as unemployment drops, and wages rise, so that people can join into the economy.

Agencies (both public and private) that help low-income and minority groups get into home ownership through grants, and most importantly, financial education, will be key in making sure the good people in the bottom rung of the economy are able to stay afloat and get homes and continue to build a life in the community.

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Divot Unincorporated Area

Divot

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Do you believe that real wages can increase due to productivity gains and therefore not increase inflation beyond acceptable levels?

No its not that your dumb. When wages increase there is more money chasing the same amount of goods, which is one of the reasons for inflation.

Yes I do understand what real means. I also understand what a fiat currency system is. See, I know it all too well

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pete11 Whistle-Stop

pete11

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No, the point you are making and you've said it more then once now is: "housing prices can't go up by more then inflation or the next generation would have to pay more for housing". If you believe that *real* wages (equation three) can be positive then your first statement is incorrect. Which equation do you disagree with:

Median Home Price (t1) = Median Wage (t1) / 0.28

Median Wage (t1) = Median Wage (t0) * Growth in Median Wage

Growth in Median Wage > Inflation

Median Home Price (t1) > Median Home Price (t0) * (1 + Inflation)

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Divot Unincorporated Area

Divot

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3. Your also forgetting population growth, and increase in housing stock.

Oh and the point I'm trying to make is not in your formula either--rapid increase in money supply. Your hallowed hedge funds and private equity firms are also experiencing a bit of turbulence.

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pete11 Whistle-Stop

pete11

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PE and Hedge funds have nothing to do with this topic... Please don't change the subject.

Assume that in the long run the housing stock grows at a rate roughly equal to population growth. Do you think that whatever measure of median home prices you want to use can increase above the rate of inflation or not?

Let's not take this to PMs, you want to talk about this topic in every thread so let's talk about it.

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Divot Unincorporated Area

Divot

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Yes, I've read that article and every other article on the housing bubble. I'm not debating if there is a housing bubble.

The point I'm debating is that housing prices can increase by more than the inflation rate over the long run. If you hold the percent that people pay of their income to housing constant at 28% (Fannie's number) and incomes increase by a rate greater than inflation then housing prices can also increase at a rate greater than inflation. This has happened over the long run.

If you don't believe that real wages can be positive (this means that wages grow faster than inflation) then you need to explain why you don't believe this and explain why your opinion does not match historical data.

If you don't want to talk about this topic any longer that's fine but if you bring it up again I'm going to ask you these same questions...

Its not for us. Its for everyone else.

The answer to your question is depends on many variables (lending underwriting etc) over the long term no.

http://www.economist.com/printedition/disp...tory_ID=4079027

Read this it is the now famous article where the economist calls the top. Again you can p.m. if you want. or if you want the last word just post again here.

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Divot Unincorporated Area

Divot

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My question is simple: do you think that housing prices can grow at a rate above inflation?

If you believe the answer is "no". I would like to hear about what your reasoning is and how you explain the difference between the historical data and your opinion. If we shouldn't use the data that is widely available and used (PCE/CPI for inflation, BLS/Census numbers for wage data and NAR/OFHEO for home prices) then what should we use and how can I obtain this information?

Historically real wages have been positive. If, as you said, housing costs should be fixed at 28% of your gross income and your real income growth is positive then housing prices will increase at a rate greater than inflation.

The reason that real wage growth can positive is due to productivity gains. If you don't believe that wages can grow faster then inflation then nothing can grow at a rate above inflation. Just as you admitted equity prices have increased faster then inflation (due to capital productivity gains) so have wages due to labor productivity gains.

I can discuss it ad nauseum. You have no clue what your talking about try putting a real formual together, and I'll show you why its flawed. Your question is not only not thought out its poorly worded. If you want to call the 2 numbers in question by reported wage growth and reported CPI of course you can come up with any answer you want because they're both arbitrary.

If you want to try to beat me on a thread cograt. The problem I have with these projects is the subsidies through HTC. Just like you I now live in MA. If you really think housing costs should be tied to wages...enjoy Rhode Island.

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pete11 Whistle-Stop

pete11

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My question is simple: do you think that housing prices can grow at a rate above inflation?

If you believe the answer is "no". I would like to hear about what your reasoning is and how you explain the difference between the historical data and your opinion. If we shouldn't use the data that is widely available and used (PCE/CPI for inflation, BLS/Census numbers for wage data and NAR/OFHEO for home prices) then what should we use and how can I obtain this information?

Historically real wages have been positive. If, as you said, housing costs should be fixed at 28% of your gross income and your real income growth is positive then housing prices will increase at a rate greater than inflation.

The reason that real wage growth can positive is due to productivity gains. If you don't believe that wages can grow faster then inflation then nothing can grow at a rate above inflation. Just as you admitted equity prices have increased faster then inflation (due to capital productivity gains) so have wages due to labor productivity gains.

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Divot Unincorporated Area

Divot

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Several people (including moderators) have PM'd me and said they would like to continue this discussion on the board since they are also interested in this topic. What we are discussing impacts them as much as it does us. I'll start a new thread so this one can be dedicated to the project in the title.

Edit: here is the new thread:

http://www.urbanplanet.org/forums/index.php?showtopic=33118

pm me and you will
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pete11 Whistle-Stop

pete11

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Several people (including moderators) have PM'd me and said they would like to continue this discussion on the board since they are also interested in this topic. What we are discussing impacts them as much as it does us. I'll start a new thread so this one can be dedicated to the project in the title.
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