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Post a Comment On: Steve Sailer: iSteve

"California to account for 66% of home value declines?"

9 Comments -

1 – 9 of 9
Blogger AMac said...

> So, that was a one-third increase in price to income ratio from 2.4 in 2000 to 3.2 in 2007, which doesn't sound outlandish.

Sounds like enough that it should have qualified as a nationwide warning of Trouble Ahead. Still--as is your point--it's the extremes in the Sand States and some other metropolitan areas that set the stage for the subsequent collapse.

3/3/09, 4:20 AM

Blogger AMac said...

Re: Definitions of "Household" and "Family"

In October, I wrote a Census Bureau statistician on this issue, and received this response:

"A household is everyone living together in a single housing unit. A family is everyone living together in a single housing unit who is related by blood, marriage, or adoption. Many (if not most) families are also family households (that is, there is no one else living with them). Examples of non-family households: college students sharing an off-campus apartment, two (unrelated) single mothers, each with a child, living together to save on expenses, an elderly couple taking in a boarder (renting a room within their housing unit), a couple with a foster child."

3/3/09, 4:25 AM

Anonymous Pat Shuff said...

Beginning in 1995, the home ownership rate has risen almost steadily until, by the third quarter of 2000, it was 67.7 percent—surpassing the President’s ambitious goal…

As the home ownership rate descends from its peak of 69.2 percent in 2004, the


~~~~~~~~~~~~~~~~~~~~~~~

Correction: Words like risen and peaks are declines and troughs. Let me explain.

While the public policy initiatives to increase home ownership were trumpeted as historical highs, an article last summer in the USA Today noted that home equity, home value minus amount owed had declined to 50% to the 1945 level, a post war low. Because home values have declined since that article, home equity is probably now lower than 1945.

So which is it, the highest post war level of home ownership, defined as owner occupied homes, or the lowest post war level
of home ownership, what is owned by the occupant minus what is owned by and owed to the lender and yet to be paid.

I think it is obvious what has been achieved through public policy initiatives during the house flipping frenzy and and ATM-like extraction of home equity through credit lines. Of the two terms, highest and lowest, I think lowest is more descriptive of reality and describes a public policy result diametrically opposed to intent. But please, keep it quiet.

If not for paying cash there would be a couple owner occupied vehicles in our driveway. If using the convenience of credit cards and not paying them off each month, instead allowed to endlessly revolve/increase the latest from Amazon would be an owner occupied book,
owner occupied food in an owner occupied fridge, owner occupied shoes.

One sees the farcical absurdity when Orwellian-speak in the form of unquestioned weasel-sucked eggs becomes embedded in the language
thus synapses and public policy. As in targeting the homeownership level
which over time, as the debt increased and equity shrank, achieved results at a rate inversely proportional to successive meetings of claimed aims. Most astonishing, they remain proud of the goals, still assume a degree of accomplishment and pursue much the same in remedy.

3/3/09, 6:57 AM

Anonymous Henry Canaday said...

Do you get the impression that the senior financial figures in New York and London, several levels away from the underlying housing assets, probably did allow for an increase in the average default rate and a decline in the average house value? Then they simply multiplied the two average changes by one another to estimate their possible losses, which they thought they had covered by profits and insurance.

But what happened is that default rates exploded in exactly those areas where house values were due for the most dramatic declines, yielding a much bigger loss. The changes to date in average defaults and price declines may not be that different from what was feared and allowed for, but using averages does not work out in this instance.

3/3/09, 4:50 PM

Blogger Ronduck said...

Pat Schuff said...

While the public policy initiatives to increase home ownership were trumpeted as historical highs, an article last summer in the USA Today noted that home equity, home value minus amount owed had declined to 50% to the 1945 level, a post war low. Because home values have declined since that article, home equity is probably now lower than 1945.

I'm just curious, but was the amount of home equity reported in the article per capita or adjusted for inflation?

3/4/09, 1:19 PM

Blogger A Conservative Teacher said...

Quick math question- If California accounts for 66% of home value declines, and Obama spends $50 billion on propping up home values- how much of that money will go to California? How much will go to Pelosi's district? At what point does someone question the legality/equality of the money distribution of these stimulus packages?

3/4/09, 5:33 PM

Anonymous Pat Shuff said...

Ronduck-

In a troubling report, the Federal Reserve said Americans' equity in their homes has fallen below 50% for the first time since 1945.

Home equity is the percentage of a home's market value minus mortgage-related debt.

USA Today 3/24/2008

http://tinyurl.com/38dpoe

3/5/09, 3:10 PM

Blogger Ronduck said...

Thank you Pat Shuff, I read your comment and completely missed the obvious.

3/5/09, 6:41 PM

Anonymous Pat Shuff said...

Ronduck-

Yes, the changing purchasing power of the unit of account over decades, the dollar, is irrelevant to the debt/equity ratio.

3/6/09, 4:17 AM

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