Comments on: 65% of Southern Californians are Delusional. No wait, 65% Jump in Southern California Home Sales. No wait, 38% Record Median Price Drop. No wait, 50% of all sales are from foreclosures. Housing and Foreclosure Voodoo Headlines.

By: Casey

Casey — Mon, 27 Oct 2008 03:26:39 +0000

Our citizens need to realize that the prices of houses in Los Angeles City areas will only decline to a certain level. The city of Los Angeles is land locked. The land under the houses is not declining in pricing. The pricing of house can not decline less than the cost to build a house. The average cost per square foot to build a house in LA is is $200. The average cost per square foot for land is $28.40. We should not hold our breath waiting for housing prices to decline the cost to rebuild turn key homes.

By: Bud

Bud — Mon, 27 Oct 2008 00:38:24 +0000

heres the reality – a vicious feedback loop is already underway.

http://www.gold-eagle.com/editorials_08/lundeen102508.html

two years from bottom. most people will be wiped out before this is all over.

By: Rafael

Rafael — Fri, 24 Oct 2008 17:51:24 +0000

This may not be relevant to the current article but I want to share an idea that a government can implement to create a bottom in the market.

This deleveraging problem has three fundamental issues:

The market has recognized that energy production and other essential materials are not going to be in expanding supply. Therefore the model for economic expansion is not going to be sustainable anymore. America will have to think about sharing the resources of the planet or follow the path of war and self destruction. The new focus has to be in sustainability.

In USA the baby boomer generation is starting to retire and the following X and Y generation don’t have the capital to buy the asset that the previous generation has amassed. There is a generational shift happening.

Credit creation and management has been the focus on this economy, credit has been our main product and a big part of the problem.

So I think that to stabilize the markets there has to be a focus on the assets that are the system is based on, and that is housing.

Government has a key roll in propping up demand, but at the same time let some of the natural correction to continue.

Create a tax incentive to new home buyers something between $10,000 to $25,000 depending of the value of the home.

Support a mortgage plan backed by the government through Fannie and Freddy. 30 yr. Fixed only 4% to 5% annual interest rate. But it needs to have some restriction:

You will need a 10% to 20% down. And the more you put down the more you can buy the interest rate.
For the incentive to work you should not be able to sell the house in three years for new home buyers.
And finally it should have a cap in the mortgaged amount from 3 to 5 times the amount of gross income from your tax return in 2007.

Now for the stock market: Move the cap for the ROTH IRA accounts and 401K to double what they are.

By: Paisano1

Paisano1 — Wed, 22 Oct 2008 14:14:31 +0000

They all better ready for the next wave of ALT A defaults – then on to the POA’s!

http://tinyurl.com/558bbd

Not even close to bottom yet…

By: nathan118

nathan118 — Wed, 22 Oct 2008 01:02:13 +0000

Percentages are such a joke. Your talk about the actual numbers really puts things in perspective. Nice work.