Sunday, June 02, 2013

Do improved home prices now make sense?

NerdWallet has an interesting article on housing prices, which may help put some perspectives on media reports about somewhat improved home prices.  The piece, by Jason Van Steenwyk, dates from Oct. 2012, but seems valid, link here

It may seem gratuitous to compare the housing mess to the challenges to civilization of World War II.  But some points are well taken.  Low interest rates will make lenders pickier about whom they give mortgages to.  They may help keep housing prices in perspective.  But the upward pressure comes from rent – that people need places to live.
I’ve always thought there was something wrong all these decades with the idea of renters as second-class citizens, not as stable, not as careful with property, and not as committed to anything.  Often, home ownership comported with having a family with children – and the attractiveness of the condominium market with yuppies and “singles” has been a bit fickle. 

But there is a certain class of persons who will pay top dollar for location, convenience, and these days, infrastructure stability.  Perhaps living in a downtown condo in New York or Washington (and particularly paying Manhattan prices to a Donald Trump) seems questionable to a lot of people – the possibility of becoming targets for terrorism, or an infrastructure that could fail if a sufficiently large disaster happens (as with Hurricane Sandy in lower Manhattan, and the week-long power outage because of ConEd’s lack of robustness at low elevations).  Nevertheless, if you’re a “professional”, or an artist or musician, or a newsman, or anything visible – you want to be able to come and go from your pad and not worry about anything.  People have to pay a lot for that.  Ask Anderson Cooper.  There can be no “Reid-ing” video  about this– secure housing is not free.  

Subsequent news stories in the New York Times say that Wall Street has been buying homes in areas, formerly crashed, that are now recovering. 

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