Jump to content

Riverboat Capsized


Recommended Posts

  • Replies 304
  • Created
  • Last Reply
RE prices in the area where I live are now about 5 times annual household income. Never thought it would get that high.

When people vent about the obscene prices of RE they rarely take this into account. I live in Silicon Valley. The median house costs $535K (a few months ago statistic, bear with me), but the median household census income is $85K.

 

I have been looking at Las Vegas. House $180K (a good guess, maybe a bit higher today), average household census income $35K.

 

OK it doesn't explain 100% of the disparity, but it goes a long way to explaining why houses should cost a lot more in the Bay Area than in Las Vegas.

 

What makes houses go down? Permanent outflow of jobs, with people moving away from the area, permanently.

 

What makes them go up? High wage job creation, and influx of people to fill the jobs.

 

I note that 5000 people per month, or 160 per day, are new residents arriving in Las Vegas. But most don't have jobs when they arrive, and are transients hoping to find better luck in life in their new found paradise than they had where they are running from.

Link to comment
Share on other sites

On the Road to Zero Bound

 

Negative interest or bank charges to keep money on deposit is a tool used successfully to offset strong currency problems. It will eventually reduce the rate of incoming new deposits and act to weaken the currency. Use it on a weak currency and you bury the currency. Stamping money is simply to dumb to talk about.

 

3/ Depreciation of the Dollar: This is an attempt to hold a fire sale on all US goods and services.

 

This is another academic discussion because the deficit is rising exponentially and it has to be financed. The limiting factor is again the value of the common share of the USA Inc., the US dollar.

 

Conclusion:

 

The tool most commonly used by the Fed to influence economic activity becomes ineffectual as the shortest rates approach zero percent. There is no question that the Fed has only one real option and that is to move to the 10-year and 30 year Treasury instruments and everything in between at a severe further cost to the US dollar and to the bond market as well for the reasons I have explained.

 

Therefore, the top in the 30-year bond is either at hand or near. The rally in the US dollar is severely limited and the downside below .92 is wide open. Gold is near its bottom right now and will take out $400 as the Fed, the ESF and the President begin to take actions within legal limits and limiting market factors.

Link to comment
Share on other sites

When people vent about the obscene prices of RE they rarely take this into account.  I live in Silicon Valley.  The median house costs $535K (a few months ago statistic, bear with me), but the median household census income is $85K.

 

I have been looking at Las Vegas.  House $180K (a good guess, maybe a bit higher today), average household census income $35K.

 

OK it doesn't explain 100% of the disparity, but it goes a long way to explaining why houses should cost a lot more in the Bay Area than in Las Vegas.  

 

What makes houses go down?  Permanent outflow of jobs, with people moving away from the area, permanently.

 

What makes them go up?  High wage job creation, and influx of people to fill the jobs.

 

I note that 5000 people per month, or 160 per day, are new residents arriving in Las Vegas.  But most don't have jobs when they arrive, and are transients hoping to find better luck in life in their new found paradise than they had where they are running from.

 

I'm going to repost this someplace later as I know this M2M is a about ended (pardon the pun), and I would like to get an answer from some stoolie about something that has puzzled me:

 

 

Using PD's example ($535K median house price and $85K median income), I go to Smartmoney.com's mortgage calculator, and it tells me that the max house I can afford is $240,000, assuming 20% down. How can the median income buyer in Silicon Valley qualify for median priced home?

 

Tanks.

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

  • Tell a friend

    Love Stool Pigeons Wire Message Board? Tell a friend!
  • Recently Browsing   0 members

    • No registered users viewing this page.
  • ×
    • Create New...