Thursday, June 10, 2010

Is the Housing Crash Over?

The Economic Collapse Blog has published a list of 12 Reasons Why the U.S. Housing Crash is Far From Over.

I have been following the housing bubble crisis for years, and I have long believed that housing prices are overpriced relative to Americans' incomes. I still think housing prices are too high and that they will continue to decrease. The My Budget 360 blog has a great article showing that housing prices are still high relative to people's income. I wonder, how will a nation of student loan-indebted people who work low-wage service jobs be able to afford all of those houses valued at over $150,000?

The Economic Collapse blog's article needs to add a thirteenth reason for a continued plunge. As Baby Boomers age they will start selling their houses, adding houses to the market, in the hopes of downsizing to smaller condos and eventually to nursing homes (and ultimately to cemetery plots). However, a great many people in the generations behind them who didn't do as well financially don't have the income needed to purchase all of these houses at current prices. (The people who have the money will be leaving the market.)


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