Where is Honesty in the US?
The Record reports from New Jersey. “When the housing market gets tough, sellers offer incentives. In Demarest, builder American Properties of Iselin is offering to park a Maserati (worth about $125,000) in the garage for any buyer who forks over $2.2 million to $3.6 million for a new luxury town house in a 34-unit complex in a French chateau style.”So is that how the wealthy think? Now we know. They don't care about how much they spend on something (like houses); they're too bored; they just want pizazz. Now we know why the median sales price is such a useless measure in Marin.
“Offering the car is better than simply cutting the house price by $125,000, said spokeswoman Karen Kessler, because ‘our buyers are not looking for a bargain; they’re looking for some pizazz and some excitement.’”
* * *Why can’t we in the US get some of this honesty (emphasis mine):
Banks told to predict effects of a 40% crash in house pricesOr maybe some of this honesty (emphasis mine):
BANKS in the UK have been ordered by financial regulators to assess how they would cope in the event of house prices crashing by 40 per cent.
The instruction to include a housing slump scenario in their stress-testing models comes after the Financial Services Authority found that some banks were failing to include gloomy enough assumptions in their modelling.
The FSA said yesterday that an “appropriate” benchmark was to assume property prices fell by 40 per cent and that 35 per cent of mortgages in default ended with homes being re-possessed.
It stressed that this was not a forecast but a “severe but plausible scenario” and one that banks should examine when deciding how robust their balance sheets were.
‘South Korea’s finance minister apologized Wednesday for the failure of the government’s real estate policy. In a press conference, Minister of Finance and Economy Kwon O-kyu unveiled another set of measures to cool down the real estate market. ‘I would like to take this opportunity to apologize to the public and the people who do not own houses for the recent surge in housing prices,’ Kwon told the nationally televised news conference…I guess for honesty in the US we just have to make do with this: David Lereah (National Association of Realtors chief (so-called) economist) says price drops of as much as 40% in California and other bubble markets are “nonsensical” yet he can’t offer his own prediction (of which he has never been short of before so what's the problem now?), while at the same time saying that one has to look to the Great Depression to find a housing market as unique as our current market.
Did Lereah actually equate today’s housing market to that of the Great Depression? That makes sense given how well the economy supposedly is yet housing is faltering in pretty much all bubble markets. I mean, if this market is as good as it gets now when times are good, what happens when the economy goes bad as it eventually must? Do you really want to be holding on to over-priced housing when the day of reckoning comes a knockin'?