My recent post: "If Housing is the Key to End Recession...Why Aren't They Doing More?" brought a couple of interesting and diverse comments.
"Housing is the key because it hold our banks balance sheets out to dry. Bad government policy for banks, along with irresponsible bankers have put us here. We need to shore up property values to stop the bleeding. This will regain confidence and start the economy up again."
and...
"The issue isn’t getting buyers qualified or interest rates, the issue is price. Housing has been in a bubble since at least the first part of this decade. Until prices return to that level we won’t be out of this. All of the government activities surrounding stopping foreclosures delay the price declines and prolong the crisis."
We mustn't forget that home prices are not artificially created, but are a result of supply and demand. Value involves a willing buyer and a willing seller, and the auction mentality of earlier homebuyers disappeared with much of the value in buyers' portfolios and their job stability.
Prices are moving down. The Mercury News reported this morning that one in five homes in the San Jose Metropolitan area (including all of Santa Clara County) are "underwater," with loans higher than the current value, falling 17.2% in the last three months of 2008 alone. I'll be watching the final version of the stimulis package, but it looks as though it will include a credit for first time homebuyers and other incentives.
2 comments:
Do you know much the Sunnyvale 94087 area values have declined? especially in ortega park, cherry chase, birdland neighborhoods?
Fortunately, these neighborhoods have not been impacted as much the 94086 areas....fewer subprime loans and better schools. Three to five percent loss in value, in most cases.
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