How bad is the housing market? So bad that realtors
apparently misstate sale prices on a regular basis (I guess in a feeble,
weak-minded attempt to boost the market and make more money on commissions):
"The Illinois Association of
Realtors said Monday that the median price it reported for home sales within
the city of Chicago was inflated in May and mistakes in its reports
may go back more than three years."
--No kidding, I'm shocked! If anyone wants the
"real deal" (a/k/a the "truth") about residential real
estate, just read this from the Wall Street Journal:
“. . .
. the average single family house has never been a particularly stellar
investment. In a society increasingly concerned with providing for
retirement security and housing affordability, this finding has large
implications. It means that we have put excessive emphasis on owner-occupied
housing for social objectives, mistakenly relied on homebuilding for economic
stimulus, and fostered misconceptions about homeownership and financial
independence. We've diverted capital from more productive investments and
misallocated scarce public resources. . . .
. . . a
dollar used to purchase a median-price, single-family California home in 1980
would have grown to $5.63 in 2007, and to $2.98 in 2010. The same dollar
invested in the Dow Jones Industrial Index would have been worth $14.41 in
2007, and $11.49 in 2010”
“. . . . A
nation of house buyers becomes captive to the economic cyclicality caused by
bursts of construction activity, and it is not lifted or sustained by the
limited levels of service employment related to existing housing. By contrast,
a nation of business startups and investors supports our capital markets and
creates long-term employment, income, exports and the myriad technological
advancements desperately needed by an expanding American society.”
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