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Whocouldaknown about housing?

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September 30, 2010 – Comments (1)

Calculated Risk had a post today about the increasing number of people per household.

I have touched on increasing household size a few times and so far it seems like it is going just as I thought.  This post I contrasted household size in North America to Britain.  I still think household income in Britain is artifically higher because of so many adults living in the same household. This post points out how the increasing household size creates demand destruction for housing.

There are now some very good dealing in housing in some areas, however, I think over all housing is still going to come down some.  I think housing is a good deal where I live.  I am getting about 5% on my capital of my whole home just from from renting a suite and I live in the house.  If I divided the capital in half, I am getting 10% on the capital tied up in the suite.  The numbers really make sense to own where I am.

1 Comments – Post Your Own

#1) On September 30, 2010 at 9:54 PM, guiron (20.35) wrote:

Well, with real estate location is everything, and it's all local. I think we're at a point where some markets have fully recovered, some have partly recovered and/or are stagnating, and others still have room to bleed. There is a sort of equilibrium now between the different markets, so some months national prices go up a little; some months they go down a little.

Where I live is a hot vacation rental market as well as 2nd and 3rd homes. The latter has very little demand now, but the former is still pretty hot. I can't even get a condo for less than $250K, and at that price you're getting the dregs, not even on the mountain. The rentals are great but don't quite pay for the mortgage if you buy now, which is somewhat surprising. But nearby land with fully built houses are going down in price rapidly, with lots of foreclosures this summer. I don't see the condo owners holding their ground forever- they aren't exactly selling now. Some of the most recent condo developments were done with the worst timing or the most sleazy methods, and those are mostly going belly-up now - there aren't too many but they are prominent and stick out. But nobody wants to buy them, as most likely the land would be far more valuable than what they built on it, probably more valuable if it were leveled.

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