Everything Is Considered Except Lower Prices
The writer in this Redlands story does a typical job of dancing around the only answer to the big affordability problem; lower prices. "It's old news that fewer than one of every five California families can afford a median-priced home in the state. A far different question might be to ask what percentage of families can afford any home at all."
"It would appear that close to half of California families are on the outside of the market. 'That is unhealthy,' said Steve Johnson, director of a real-estate think tank." RE think tanks?
"Another factor helping some people is the fact that some lenders now are offering 40-year mortgages. 'It seems like all we're doing is renting from the bank anyway,' Johnson said. 'I remember when mortgages went from 20 years to 30 years, so I suppose this is not that big a deal.'" (!)
The writer finally came out and said it. "At this point, anything that gets more people into the housing market is helpful."
Another idea is to remake the universe. "Economist Jack Kyser says people with lower incomes could benefit if we were able to 'unlock' parts of the housing supply. 'There are some areas, such as South Los Angeles, which are very affordable and very centrally located,' Kyser said. 'The thing that's keeping this part of the supply "locked' is problems with crime and with poor schools. It won't happen overnight, but if we could improve safety and the schools in some of these areas, we could add a lot more housing supply."
7 Comments:
It seems like all we're doing is renting from the bank anyway.
Sadly, this seems to be a fact. The concept of a mortgage as something to be paid off has faded away. It's considered a quaint notion, kind of like paying your credit card balance each month.
( don't those neighborhoods become safer when property values rise and the renters are kicked out and sane people move in? )
You mean the opposite of White flight?
Interesting that the real estate overlords are praying for a ghetto-makeover to keep the bubble blowin'.
bob r:
I remember learning about the feudal system in school, and wondering how it just seemed to end without any explanation. I suppose it never did really end, and today it's coming back. "People were tied to the land, often times never leaving during their entire lives, unless by marriage."
I think I stumbled upon a RE Think Tank last week. I was in a TGI Friday's next to a table of mortgage guys and gals who were regaling themselves on the finer points of getting otherwise unqualified folks into mortgages. Only in New Age Mortgage Finance would you find mango Margaritas served during Think Tank meetings.
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--- if we were able to 'unlock' parts of the housing supply. 'The thing that's keeping this part of the supply "locked' is problems with crime and with poor schools. It won't happen overnight, but if we could improve safety and the schools in some of these areas, we could add a lot more housing supply."---
I think what this fellow means is that we could really jack up the prices in South Central if we could somehow remove the coloreds.
"Unlock the value" then becomes "lose the Negroes".
Looking back, maybe all Herr Hitler was trying to do by extirminating the Jews and Gypsies (and assorted unwashed) was simply "unlocking the value" of their real estate holdings.
bookishbetty,
I'm willing to give Kyser the benifit of the doubt. My point was he proposes to completely reform S. LA to help with housing prices when a simple 20% down policy would solve the problem in 6 months. Of course, with the bubble price demon locked into mortgages, policy makers are loathe to think such a thing and instead start baking pies in the sky.
Thanks for all the great comments.
It won't happen overnight, but if we could improve safety and the schools in some of these areas, we could add a lot more housing supply
It won't happen overnight, but if we could improve safety and the schools in some of these areas, we could add a lot more housing supply.
So next thing this guy is going to say is we should take all the crack addicts and anyone else who can't make mortgage payments and move them to Mexico.
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