Sat, Jul 04, 2009
|
Author |
Fortune Magazine RE Article - Boom/Bust |
fmmp
416 Posts
Member Since: 09/07/2003
East Saint Louis, IL
 Join fmmp's Network
What's My Favorites Network? |
Posted: 11:04 on 09-24-2004
Did anyone catch the latest fortune article concerning the RE boom/bust? Here it is online:
http://www.fortune.com/fortune/investing/articles/0,15114,693864,00.html
You need the entire string in your browser to view ending with html.
[ Edited by fmmp on Date 09/24/2004 ]
Profile of fmmp
 Edit/Delete Post
 Quote this Post
 Report this post
|
Dumdido
152 Posts
Member Since: 06/14/2004Join Dumdido's Network
What's My Favorites Network? |
Posted: 12:11 on 09-24-2004
Interesting article - Thanks for the link
Profile of Dumdido
Edit/Delete Post
Quote this Post
Report this post
|
jeff12002
1384 Posts
Member Since: 05/10/2003
Avondale, AZ
Join jeff12002's Network
What's My Favorites Network? |
Posted: 00:37 on 09-25-2004
It's gone now. Didn't stay up very long.
Profile of jeff12002
Edit/Delete Post
Quote this Post
Report this post
|
Gerrym
5 Posts
Member Since: 04/18/2004
Forest Grove, OR
Join Gerrym's Network
What's My Favorites Network? |
Posted: 00:50 on 09-25-2004
It's still there. You just have to use the complete address:
http://www.fortune.com/fortune/investing/articles/0,15114,693864,00.html
Profile of Gerrym
Edit/Delete Post
Quote this Post
Report this post
|
64Ford
882 Posts
Member Since: 08/26/2003
Charlotte, NC
Join 64Ford's Network
What's My Favorites Network? |
Posted: 06:59 on 09-25-2004
Forsome reason the last few digits of the link are being printed on the page by tci, but not included in the link. Just copy and paste those numbers and you should be able to find the article. Good Luck!
http://www.fortune.com/fortune/subs/article/0,15114,693864-1,00.html
Profile of 64Ford
Edit/Delete Post
Quote this Post
Report this post
|
rajwarrior
1657 Posts
Member Since: 03/05/2003
Claremont, NC
Join rajwarrior's Network
What's My Favorites Network? |
Posted: 08:24 on 09-25-2004
This story is only available to Fortune Mag subscribers. If it is of interest to the REI community, please get permission to reprint and submit it to the articles section.
Roger
Profile of rajwarrior
Edit/Delete Post
Quote this Post
 rajwarrior's Group
Report this post
|
NailDriver
3 Posts
Member Since: 09/06/2004
Raleigh, NC
Join NailDriver's Network
What's My Favorites Network? |
Posted: 11:46 on 09-25-2004
Interesting article which, however, exhibits a flawed logic from some of the "experts."
One analyst states, for instance, "...rents exercise a gravitational pull on housing prices."
This seems to assume that owners and renters occupy the same consumer pool, and that renters exercise an economic decision when choosing to rent rather than buy. But, that's overly simplistic and actually flawed logic.
These are not identical populations. Renters are actually homebuyers-in-waiting. They are green to the market -- often young people who are not ready for ownership, or potential buyers prevented by present circumstance. The test of this is that you won't find many consumers who believe it is economically advantageous to pay rent when they could own. That why most every renter eventually becomes a property owner.
Therefore, I disagree with the logic that says rental prices will act to keep purchase prices down. Nor do I beleive that rental prices are what buttress home values. Home values are, rather, a matter of simple consumer demand and the ability of consumers to meet the price. Have you ever heard of a consumer reasoning thusly?...: "Well, I'm not going to pay $500,000 for that house since my mortgage payment would be $6500, and I can rent one for just $4000 a month."
Is that supposed to make economic sense? Even a high school drop-out can tell you that a year of such rent is $50,000 thrown away.
No, the "disconnect" these analysts cite between rental prices and home prices is not one of economics. It is one of demographics.
Therefore, it is flawed, I beleive, to say that housing prices must "come back" more in line with historical ratios of rents-to-ownership cost. Demographics set the economic trends, they don't necessarily follow them.
So, I fail to see how low rents will act to burst a "housing bubble."
Profile of NailDriver
Edit/Delete Post
Quote this Post
Report this post
|
|
|
|
| |
|
