Builders are having problems

Normally building should ramp up in a recovery but there are problems.Many smaller builders were wiped out in the last recession. Some can’t get financial backing in a tight credit environment. Money has dried up. Much of it came from small community banks that failed. Lehman brothers who was a large supplier of such money is gone and the teachers fund lost a lot so they are no longer players in this market.

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Freddie Mac’s assessment of home price evaluation

Are prices really an indicator of the real estate market’s health?

There is much speculation about whether we are in a bubble that will burst and what is normal. Should we compare today’s prices to the top of the last market? How do you determine what is the best time to buy, where to buy, and how much to pay. So many markets are different today and you can’t really make an overall evaluation.

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Are Houses Still Undervalued?

Are Houses Still Undervalued?

It usually follows that income levels are related to housing prices. So when incomes rise, people have more money to purchase

Renting and owning are generally considered to be “economic substitutes,” so Fleming says, “A significant difference in pricing should draw more demand to the less expensive option, therefore driving up pricing and removing the significant difference. This constant reversion to equilibrium between the two substitutes means any significant difference must be due to irrational exuberance on the part of the homeowner or renter.” Translation: people will do what is cheaper- rent or buy.ney to spend on  housing so demand goes up and therefor prices. That has  not held true in the last few years, Prices went up l ike crazy

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