Comments on: Housing Will Not Cause A Recession

By: 1 year later

1 year later — Thu, 29 Jan 2009 17:29:47 +0000

You were saying…

By: david in norcal

david in norcal — Sun, 03 Feb 2008 05:03:13 +0000

Wow, you have some mendacity.

Everywhere else where Housing is implicated in our economic fortunes they say because it relates to home related purchases and remodeling as well as construction jobs when the housing market is hot.

Of course, you just define it as “housing” alone and pretend that everybody else is stupid.

That’s straw man argument. Housing isn’t everything –but it affects nearly everything.

Furthermore, the disaster in Mortgage Backed Securities has harmed banks, lenders and nearly every investor in the past 6 months.

Seems like your post is too much good news to be true –sadly it is.

By: Larry Lang

Larry Lang — Sun, 03 Feb 2008 03:50:24 +0000

While it might only be a small part of GDP there are other facts to consider that are effected. The mortgage industry, home improvements, remodeling, purchases of new appliances, furniture. landscaping. pools, screens. The list goes on and on. When someone purchases a home the additional expenditures in other industries filter through the economy and effect many other sectors. Larry Lang View South Florida Homes at South Florida rentals and homes sales

By: Real Estate South Africa

Real Estate South Africa — Fri, 01 Feb 2008 13:59:57 +0000

Good article and good point. Let me give you an example of what’s happening in South Africa right now. Power shortages, increase in inflation, decrease in government power due to people not believing they’re capable of keeping South Africa going, interest rates sitting at 14.5%, house prices WAY higher than your average person can afford…

With the addition of the Credit Act they put in place 6 months ago which now gives people with bad credit 0.0% chance of getting a loan from any financial insitute.

BUT STILL our property prices rise, and for some reason they’re not dropping interest rates either. GO FIGURE

By: Joe P

Joe P — Thu, 31 Jan 2008 22:43:11 +0000

Interesting at the end of 2006 I thought the housing market played a near 10% roll in our GDP. However there is more truth in an ever expanding consumer debt to income ratio that has been swelling for the last 10 years, housing was simpy a way for people to find more money to spend.

With bank failing to securitize their commercial and real estate debt- its puts their overall expossure at a very high level and dangerously close to insolvency. Was there recently a figure that also placed every dollar in circulation being leveraged about 27 times?

By: Corey

Corey — Thu, 31 Jan 2008 19:19:54 +0000

I completely Disagree. Let’s take your GDP example. GDP is no longer a true reflection of our economy. Simply, because we have to import 80% of the raw materials need ed to produce our exportable products. The housing industry is not immune to this by any stretch. Think of all the raw materials that are needed to build a house. How many of those are imported from countries like China, etc?

Are housing market hasn’t just slowed, it is crashing. The housing issue is simply a symptom of a poor economy. Prices of homes are still high, because it takes that many dollars to purchase a house now. Due to the devaluation of the dollar itself.

A stuffy nose certainly makes it harder to breath.

By: Paul

Paul — Thu, 31 Jan 2008 18:25:41 +0000

I agree. It is mostly from credit card and such. However housing is still a major issue because if they will pay a house payment before anything else. So it adds to the cycle.