As a continuation of my previous blog post on Lawrence Yun's speach at the National Real Estate Cyber Convention, here are some further highlights and what I think are interesting tidbits of information about the state of the current housing market and predictions for the year ahead:
- The decline in housing prices is destroying middle class wealth.
- Average home price to income is now below historical levels.
- More importantly, the average mortgage payment to income (by middle income person buying a medium priced home) is below historical rate. This implies an overcorrection in the market. Therefore a stimulus is actually justified in the form of the tax credit in order to prop up the overcorrection.
- If consumers feel more comfortable that their home