An article from the January edition of Reason Magazine caught my eye the other day. It shows just how far out of whack home prices had gotten. Editor Tim Cavanaugh writes that “Comparing data from the U.S. Census Bureau and the National Association of Realtors, a house today costs four times your annual salary. Ten years ago it cost only three times as much. In 1988 it cost twice as much; in 1978, less than twice as much.”
The day before I read that I had got an email from Rob Jenson, a Realtor in Las Vegas whom I’ve found is very honest about the crummy state of the market. His email was titled “The moment we’ve all been waiting for,” and it went on to say “You can finally buy investment properties and get a Positive Return on Invesment!”
He didn’t elaborate on the math but I’m sure he’s right. Prices in Vegas have finally fallen to the point we’re buying actually makes financial sense.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.