This bucket of cold water brought to you by MarketWatch.
After years of hearing how home prices are plummeting and foreclosures are mounting, consumers want to feel hopeful about the housing market — but maybe they’re being too optimistic.
In a presentation to the National Association of Real Estate Editors in Austin, Texas, last week, Stan Humphries, Zillow.com’s chief economist, pointed to four myths he said consumers are latching on to as they try to make sense of recent housing statistics.
And the four myths are:
1. The housing recession is over.
2. After markets hit bottom, prices will rebound to boom levels.
3. The worst of the foreclosure mess is behind us.
4. The tax credits saved the housing market.
None of these are true, and they didn’t even mention some other tectonic factors that are going to keep real estate in teh suck for at least 5 years, probably a lot longer. One of the big ones is demographics. The baby boom echo has either bought in to real estate already, or is saddled with student loans. That’s the other bubble that nobody talks about; the education bubble. 20-somethings these days, unlike a generation ago, are 1, 2, or more annual salaries in debt when they graduate. This is the result of the government “helping them” by “making education more affordable”. They’re going to be locked out of the housing market for a decade.
Aren’t you glad the government is helping out the little guy?
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If this isn’t enough, these geniuses are seriously considering driving another stake through the heart of the real estate market. They’re seriously considering repealing the mortgage interest tax deduction. That’s going to really help entry-level buyers get into their first houses, innit? Remind me again that these are our best and brightest. We couldn’t be in better hands, or so I’m told.
Tags: Real Estate
