My 2 Cents!

(post my Marissa) When it rains it pours. 3 posts in 1 hour. Possibly a 4th. Too bad there are not really any pictures on any of them. They are kind of boring posts. Anyways, here is my two cents on a few things. If you take a look at the above graph you will notice steep incline in housing prices between 2004 and 2005. Also, notice the steep decline in late 2007 until now. Well if you take out the steep increase/decline the housing prices are nearly where they should be if it would have followed a gradual increase. While reports of the sharpest decline seem to be on every news channel, I think they should mention that it is probably due to the too large of incline in 2004/2005. In my opinion the market is adjusting itself to a more realistic housing situation to where incomes match the housing costs. When all of this rise in housing was going on, I could only think to myself something doesn't match. The average income cannot afford the average home...hence the now housing problem of people in homes they can't afford. What is even scarier is that because credit is tightened right now (to probably a more realistic level) the economy is tanking. Because people actually have to put some money down on a car or a house or actually be able to afford what they are buying, our economy can't survive it. I think all of this was inevitable. It was the perfect storm brewing. Nearly every household was on the brink of not being able to afford their lifestyles. Maybe things will get back to normal. I mean should a good ole Suburban really cost 50,000? Should a union worker really make more than some college grads and have a Defined Benefit Retirement program? Defined Benefit programs are no good...