Housing Doom

Why would a couple struggling to sell two normal-sized homes jump right in and buy another large home? Couldn’t they just rent for awhile?

I know it’s hard to rent with five kids (!), but this is NOT a good time to buy right now. Or sell, obviously.

If the divorcing couple really wanted to move on, they’d slash the price of the house and go. People, deep down, know what they need to do. They just won’t do it. They’re either in denial or just afraid to move on (and maybe die alone?).

MikeC-

You are right about the lowering. I see a lot of listings where those price reductions are happening in response to someone else lowering theirs.

The leader always have the advantage– just following the market down is not real useful.

Manfre-

Although I’m not Catholic, I have always been a great admirer of Mother Teresa. I read a story about her once that I thought was a great business lesson.

The story said that she had been traveling with a new assistant who wanted everything to go perfectly. The assistant kept running to Mother Teresa saying, “We have a problem!”

Apparently after this had happened a number of times, Mother Teresa told her, “I don’t want to hear any more about problems. The next time something happens, I want you to come to me and say, ‘We have an opportunity…’”

Shortly afterwards, the assistant learned that their flight had been cancelled and they would have an additional four hour layover. She went to Mother Teresa to explain the problem and started, “We have an opportunity…”

Mother Teresa was reported to have said, “Wonderful. This will give me a chance to read my bible.” She curled up contently with her bible and spent the layover reading.

There are those who accuse us bears of being pessimists, of being doomsayers. I like to think that we are the optimists and realists who are willing to size up a situation warts and all and say, “I can make this work to my advantage.”

It would be nice to have a follow up and see if these folks figured that out.

You know, after a couple years of thinking this over and analyzing it, I keep coming up with variations the same question:

“Why would house prices quickly resetting to 2-3 X income be such a negative thing?”

It’s not gloomy, pessimistic, doomish, or bearish to have the price of something everyone needs at a price point that everyone can afford.

Why do so very many people think that prices at 5X income is a “good market” and 2-3X income is a “bad market?”

When I hear (other) Realtors talk about the market “turning around” and “getting better” I ask a question like that, and haven’t yet gotten a good (viably intelligent) response.

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Would toilet paper at $ 5 / roll be a “good market” and 50 cents be a “bad market?”