Wednesday, February 6, 2013
Housing Optimism Premature.
Yes we are assuming that the past informs the present. However I want you to look at this chart that I have posted from the second item. Fundamentally the new generation has adopted the condo lifestyle close to their work. The trend is moving against the single family dwelling model for efficiency sake.
Thus Shiller is right that optimism may well be misplaced and we could be seeing a new life way taking shape that backs of from the massive commitment that a single family home demands.
Cities are also waking up to the Vancouver model in which modern condos are all stuffed downtown to completely revitalize the region. Add in rapid transit to satellite hubs and the car is off the road.
In Vancouver the traffic entering the core has stagnated for years because of this while the population of the core has surely doubled.
SHILLER: All This Housing Optimism Is Way Too Premature
Henry Blodget and Lucas Kawa | Jan. 25, 2013, 4:36 AM
Yale professor Robert Shiller is one of the pre-eminent experts in house prices.
Blodget: One of the things I feel that people might be missing is that if the economy does return to strength, at some point presumably interest rates will start to rise to more normal levels which will change the cost of mortgages and make them much more expensive. How much do you think the cost of mortgages affects the price of housing, and if interest rates do go from 4 now up to 7 percent, will that dampen house prices?
This item comes from an investment newsletter and the chart tells it all.
Breaking: We Hit the Peak in 2005!
According to the American Public Transportation Association, from 1995 through 2011, public transportation ridership increased by 34%, representing a growth rate higher than the 17% increase in U.S. population, and higher than the 22% growth in the use of the nation's highways over the same period.