The Housing Equilibrium

Everything in life seeks equilibrium and balance. It doesn’t matter what it is... everything seeks balance. If you work too hard you will get sick and you will be forced to rest. If you don’t eat you get hungry. When the government manipulates affordability in housing markets it throws off the true market equilibrium. Fundamentally the government was attempting to create a new equilibrium where are greater percentage of the population were home owners. We now know that though well intentioned this push had severe consequences.

I have written a fair amount on this subject before. However the attached article is a compelling reminder that false supports are preventing us from finding the equilibrium. Letting the market correct will bring real stability back into the market. Yes, prices will likely be lower but the footing will be firm. False supports will continue to promote indecision in the marketplace and the reality is that the market is seeking a true equilibrium in spite of these false supports... hence the drop in sales numbers.

See the URL below:

http://money.cnn.com/2010/08/31/real_estate/federal_housing_programs.fortune/index.htm?section=money_realestate&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_realestate+%28Real+Estate%29

Desk of Zach Trailer
By Lanny Berg

A Bit of Perspective

This is an interesting article that brings a bit of gravity back to the encouraging housing sales statics that we have seen in 2010. The crux of this article touches on the fact that a high percentage of our national wealth is tied up in the housing market. Of course, over the last 10 years this wealth was leveraged to consume. The appreciating asset of our homes over the last 10 years created an "ATM" that people could then draw from for all sorts of purchases. Though this ATM has dried up for the average person the truth that this article points out is that this has other consequences that ripple through the economy affecting construction, small business, and government employment all which contribute to the jobs engine in the United States. This is a good read that helps bring to life the ripple effect that an overall reduction of value in the real estate market has.


http://finance.yahoo.com/real-estate/article/109507/real-estates-far-reach-to-continue-to-pinch

Multiple Offers Abound

California is an amazing place: The weather, the diversity, the geography, the innovation... all of these factors make California like no other place on earth. Real Estate in California is no exception. Over the last seven years as a Realtor on the Peninsula in the Bay Area I have seen an historic ride up. What is more amazing is that as other markets have fallen spectacularly across the country, the mid-Peninsula has held-up spectacularly well. This just goes to show the resilience that Palo Alto, Menlo Park, Atherton, Woodside, Los Altos, Los Altos Hills, and Mountain View have. With Stanford and the heart of the of Silicon Valley a stones throw away these housing markets remain incredibly resilient. Multiple offers currently seem to be the norm in the heart of the Peninsula. Low interest rates, a rebound in the equities markets, and low inventories are feeding a sellers market. Weekend open homes inn the 1.3M-1.8M range have seen 50 plus groups of people through in a single day. The oldest words in real estate are location, location, location... this continues to ring true.