April 7, 2010

SOME HOUSING GOOD NEWS? Rental prices stabilize. That suggests a bottom. Meanwhile, sellers remain unrealistic. Looking around my neighborhood, the (few) houses that have sold in the past year have sold at 10-15% less than they were bought for in 2005-06. Yet many people are on the market with their houses priced at a 10-15% premium above their 2005-2006 values. Those houses aren’t selling. You’d think people would be quicker to catch on, but either (1) they’re being protected from reality by some sort of corporate relocation subsidy; or (2) they’re idiots; or (3) they just can’t afford to sell for less because they’d be underwater and they have no equity or money to bring to the table. Judging from Suze Orman and Dave Ramsey’s callers, that situation is a lot more common than I would have thought. It’s always been our philosophy to buy less house than we can comfortably afford, but many people clearly feel otherwise.

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