cheaprealty net

Is that wishful thinking? Do I detect cracks in the foundation supporting skyrocketing housing values? Can these inflated asset valuations actually return to normal historical values anytime soon?

Ten reasons why we should hope so:

10. Baby Boomer retirements should be financed by income producing investments, not asset inflation and reverse mortgages.

9. Young couples should be able to buy a 700 square foot home for less than $700,000.

8. Less money spent servicing debt on massive loans means more money for savings and regular consumer spending.

7. An economy based on equity extraction is not the same thing as an economy based on spending money earned and in the bank.

6. Overpriced McMansions in the 'burbs might not look so fresh if heating and transportation costs spiral. That won't happen, right? Try this: bring back working class bungalows, instead.

5. Younger generations should be able to afford to buy the housing stock of Baby Boomers with some hope of asset appreciation themselves - or, what was the point of buying a house again?

4. Cheaper prices increase the pool of potential buyers more fundamentally than a (temporary) change in interest rates. Low rates in the last 5 years only created an illusion of affordability. Of course, even as prices escalated phenomenally. If wages shoot up, maybe I'll be wrong about this.....

3. Immigration is another way to plug the supply side gap in the pool of younger buyers - continued high valuations can be supported by more and more immigrants wherever you are - because they will buy houses no matter what the price, right? That's a preferred solution, right?

2. Lower valuations mean lower property taxes!

1. I don't want to pay that much!

More affordable housing is the best way to spread wealth among the population at large. High valuations, high foreclosure rates and huge mortgages act in the opposite fashion.