Housing bottom in? Not likely.......

Housing has been on the decline for quite awhile. Is there an end in sight? In our opinion, no; not yet. We think that housing will bottom when the prices represent a fair market value. What we mean by that is prices have not been fair for a long time. In order to sustain an economy it is necessary to have households and/or businesses in order. This should be a no brainer for anyone who took basic economics. This is known as the household-business cycle. When either or both of these entities are out of balance it throws the system off. It is the economic philosophical model (system) that is broken. Let me explain this in simple terms......... Homes that cost 200,000 or more is completly out of reach for most Americans. Sure, banks will loan you the money. However, if you examine a typical 30 year loan you will find that this price eats away @ 50% of an average (median) single earners income. As the global economy takes more jobs away from America there are less people that can afford such a price. In fact, it usually takes two earners to afford a home in that price range. Basing homes on two income earners should increase the risk of default. However, we believe that the brainiacs that do the risk modeling fail to include this in their valuation. In todays economy, at current national savings rates and tremendous debt load that the average American holds; it becomes reasonable to assume when one earner of the two earner equation loses their income for any reason; default is likely. Please take the time to review the new S&P data released today:

http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_csmahp/0,0,0,0,0,0,0,0,0,1,1,0,0,0,0,0.html

Just click on the March data. Then view the data in graph form with Excel.

Tell us what you think.............