My New Blog

According to a very recent article in the Wall Street Journal, "it is very likely that April 2008 will mark the bottom of the US Housing Market.  Yes, the market is bottoming now."

How can this be?  Read on

"Most people forget that the current housing bust is nearly 3 years old.  Home sales peaked in July 2005.  Housing starts have fallen more than 50% and, adjusted for population growth, are back to the trough levels of 1982."

So, what's going to stop the housing decline?  According to this article - and it makes sense...

"Very simply, the same thing that caused the bust, affordability!  The boom made housing unaffordable for many American families ... especially first time homeowners who were paying up to 37% of their gross income for house payments."  That was just too much.  Prices got so high that people couldn't afford to live in the houses, so the bubble burst.

As a result of declining house values, slightly increased incomes, and lower interest rates, housing is again becoming affordable.  As soon as the public becomes more aware of this, people will start buying again, inventories will decrease, and this housing crisis wil officially be declared OVER!

So, the next question is, How can house prices stop declining?  The very simplistic answer is that "they always do."  Property has proved to be the best investment, over time, that anyone can make.  Most of the very wealthy have become wealthy through investing in real estate.  So, prices will rise again, much more slowly that during the boom, but they will rise. 

Sounds good to me. 

Enjoy your day/