This Associated Press Article is pretty funny, if you know how to read it. The title says US Home Prices Tumble A Record 14./1% in 1Q.
Standard & Poor's/Case-Shiller said its national home price index fell 14.1 percent in the first quarter compared with a year earlier, the lowest since its inception in 1988. The quarterly index covers all nine U.S. Census divisions.
Oh NO! What are we doing to do? Here's the problem. House prices falling isn't a positive thing, but I've been innoculated against such news after reading so many stories about people who bought a house for $200,000, saw it rocket up to $600,000, and now have to sell it for only $520,000, and are hurting because of the equity.
So why do we need to read further than the first paragraph?
Prices nationwide are at levels not seen since the third quarter of 2004, according to Maureen Maitland, a S&P vice president. However, the index is still up 60 percent versus 2000.
So, prices are at the same place as they were in 2004. In a rational world, this would be called a correction. We all knew the housing market was overheated, but it's not that bad, unless you did something stupid like try to make a quick buck flipping a house, or pulled equity out of your home without leaving a cushion.
This is not a horrible situation. This is what the market is supposed to do. I bought my condo in 2005, at the peak. The value has dropped, and if we sold, we'd lose money, but that's the way real estate works. We expected to lose money if we moved in the first 3 years, and that was in a good market. So as someone who bought within their means, it offends me that the government is offering to bail out idiots and fools and speculators who don't understand risk.
If government wants to help me, how about doing something about my property taxes, which add some $300 a month to my housing payment? How about government at the city, state, and national level, consider cutting spending by real amounts instead of jacking up spending in boom times and jacking up taxes to cover their butts in slow economic times?
Companies like Anheuser-Busch cut 5% in their budgets every year to improve financial performance. Why can't we get politicians who promise to do the same for local, city, and state governments, instead of urgent pleas for emergency tax increases, high assessments from the county, and pleas for bailouts from the federal government?
Democrat or Republican, I'm voting for the candidates who promise to cut away at their budgets. Any takers?

