Are Mormons betting the farm?

[Robin]

Originally Posted by MikeWaters

for the housing market to crash, there must be a surplus of housing. That's the issue: it's still a tight market.

My understanding is that a lot of the real estate being bought and sold in the West is speculative investment. Sure they will rent it out to someone, but the rent won't cover the cost of the mortgage. If these are second homes and rental homes, does that not suggest a bit less tight of a market than it would otherwise appear?

But I guess there is a really tight rental market too... at least there is in Los Angeles.

Perhaps we are witnessing an historic division of land ownership that will come to redefine 'the American Dream,' putting home ownership permanently out of reach of a vast majority of working class people, like it is in many other countries.

[MikeWaters]

no, you will witness migrations of people to areas with cheaper housing.

I'm not sure, but I believe house ownership now is the highest it has ever been.

[Robin]

Originally Posted by MikeWaters

no, you will witness migrations of people to areas with cheaper housing.

I'm not sure, but I believe house ownership now is the highest it has ever been.

A couple of points...

Sure, home ownership might be high right now, but what does that mean if the ratio of mortgage debt : personal income and the percent of risky loan packages is also extremely high?

"Ownership" has a fairly specialized meaning when you are paying interest only on a loan that actually GROWS over time.

And as for urban sprawl, that seems to be a different house of cards. Sprawl can only stretch as far as there are real jobs. It ultimately has to tap into some kind of real industry (ie. not service jobs like medicine and lawyering) to bring fresh money into the local economy.