A La Carte (2/23)

  • Tim Challies
  • 02/23/09
  • 3
An Illuminating Housing Chart
“Here’s the big problem with almost all the current rhetoric about the housing crisis: It presumes that the goal should be to get house prices rising again. The problem with that idea is that, even after a 25% decline, house prices are still way too high.”
Flight 1549 Interview
“You heard the miraculous news of the US airplane going down in NYC. Did you know there was a CMDA student on board? Listen to how God worked in and through this catastrophe in this first person account.”
What Does coram Deo mean?
If you read Tabletalk you’ve undoubtedly heard this phrase many times. In a brief article R.C. Sproul explains what it means.
Everyone Loves Google…
…until it gets too big. “‘You almost feel sorry for Google,’ said Danny Sullivan, editor in chief of Search Engine Land. ‘They’re doing a good job and people are turning to them. But when they pass 70 percent share, people are going to be uncomfortable about Google becoming a monopoly.’”

Comments (3)

1
Anonymous's picture
a comment from Terry Rayburn • 02/23 @ 1:27pm
› visit my web site.

The housing chart theory is partly correct, but it doesn’t take “location” into account.

Location can drive up prices severely by supply and demand.

For example, an average house in Clarksville, TN is about $150,000 (1500 sq.ft., 2-car garage, no basement).

That same house in mid Long Island, NY might be $400,000-$500,000. If prices are to come down there, it would primarily be because of less demand, since the supply is fairly fixed.

Back in Clarksville, TN, there is plenty of land and new construction, so supply keeps up with demand and the prices remain relatively low.

Seattle, WA has such short supply and high demand that many people live on houseboats. A houseboat home might cost $1 million, but a similar home in a high-demand area on land might be $1.5 million.

Bottom line: the chart doesn’t recognize the increasing scarcity of land in high-demand areas, not a problem in the previous centuries.

Extreme illustration: try to find a cheap house in London — England, not Ontario :)

2
Anonymous's picture
a comment from Angie • 02/23 @ 4:24pm
› visit my web site.

Hearing how houses are overvalued wasn’t good news for me. I personally need demand to go up again and prices to rise in my former California neighborhood, or our investment in a house there will not have been such a good investment after all . . .

3
Anonymous's picture
a comment from Reg W Schofield • 02/23 @ 7:02pm

Greed . Greed .Greed. In my area you do not hear people talking about buying a home , they buy a commodity in hoping to move up the property ladder . The sad thing is that the people that my Dad has observed doing this are Christians and he is not . He is perplexed that if Christians are not to be tied to worldly things , why is it they sure look like the unbeliever when it comes to money and possessions .Granted that is a sweeping statement and I try to explain its not always that way but even my own eyes witness this. I have long argued developers are a blight o the ordinary worker who wants to purchase a home . My wife and I have never been even close to buying a home and if they do fall to real values again perhaps we will be able to buy a home .