Today someone asked me "When do I think the Housing Market Will Turn Around"?
The answer is so simple it is easy to miss. When Houses are affordable again, then the Housing Market will turn around. When a people are able to buy houses in their desired area according to the general level of welfare.
It is hard to value a house as an asset. Your Bank calls it is an Asset, But it does not produce any income. It is actually a "Liability".
The Pyramid of Multiple Layers of Massive Leverage, Inflated Prices and Illiquid Nature of the Housing Market is a process that needs to play out. Perhaps 5 Years.
If house Prices dropped including forecloses and bank sales by 50% I would buy a house. That's how cheap I think houses are now. That's My opinion, I could be wrong. If we watch the signs of the Housing Market we should be able to see it turn.
The housing market is not like Trading Forex with massive Leverage after US government data with no stop loss. The Destruction happens slower.
I would not buy a House In New Orleans. I would love to visit. But to own property there serves no purpose for me, or joy because I would not want it to get flooded. Perhaps there are areas of the world inhabitable by our changing weather patters.
To Stimulate our economy we need something BIG to happen like T. Boone Picken's Plan for Wind Farms and Comp Natural Gas. Energy Independence and Boom in building the new infrastructure for Gas Stations.
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