There they go again
I think most of us lean either positive or negative. We either see the glass as half full or half empty. We expect the best in people or the worst. We are trusting or skeptical. There is a force for the greater good or everything is a conspiracy. We either believe in Santa Clause or we don’t. The folks the UCLA Anderson Forecast don’t believe. They lean way left of center. Each quarter they issue an economic report forecasting the direction of the state’s economy and the housing sector. Each quarter they make headlines because the report always forecasts the collapse of real estate. This week and their most recent report was no different.
The report released Monday said that the downshift in real estate will lead to job losses and erase the “wealth effect” generated by rising home prices. The report goes on to say that the housing boom is over and it will cause inevitable weakness in the U.S. economy resulting in job layoffs.
So the soft landing that we are currently experiencing in the real estate market, is going to weaken an economy and lead to massive job layoffs? Weaken an economy that war and nature has attempted to dismantle without any success? The physiological babble about destroying the “wealth effect” which will stop millions of us from buying anything isn’t based on any historical or factual standard. Who pays these people?
The people at the Anderson Forecast must think that just because our homes don’t appreciate 20 percent each year that life as we know it will stop. We will not build or buy any new homes, we will not do any home remodeling, will not send our kids to collage, take vacations and buy stuff. Do they really think that homeowners are so naive? That we don’t understand the dynamics of the market place? That we are so dependant upon and addicted to this so called wealth effect that we can’t live without it?
Homes aren’t commodities like gasoline or orange juice. They are not primary investment vehicles like your 401K or an IRA. It doesn’t need to appreciate 20 percent a year for us to enjoy the “wealth effect.” The appreciation rate on a home, like the tax benefits are contributing factors to owning one but I suspect the many other benefits are more important if by circumstance we had neither appreciation nor tax deductions. Home owners will continue to feel this so called “wealth effect” because they own their own home not because it has recently become an ATM machine. The glass is still more than half full when it comes to owning a home in California and should be pointed out to the folks who study such.
The report released Monday said that the downshift in real estate will lead to job losses and erase the “wealth effect” generated by rising home prices. The report goes on to say that the housing boom is over and it will cause inevitable weakness in the U.S. economy resulting in job layoffs.
So the soft landing that we are currently experiencing in the real estate market, is going to weaken an economy and lead to massive job layoffs? Weaken an economy that war and nature has attempted to dismantle without any success? The physiological babble about destroying the “wealth effect” which will stop millions of us from buying anything isn’t based on any historical or factual standard. Who pays these people?
The people at the Anderson Forecast must think that just because our homes don’t appreciate 20 percent each year that life as we know it will stop. We will not build or buy any new homes, we will not do any home remodeling, will not send our kids to collage, take vacations and buy stuff. Do they really think that homeowners are so naive? That we don’t understand the dynamics of the market place? That we are so dependant upon and addicted to this so called wealth effect that we can’t live without it?
Homes aren’t commodities like gasoline or orange juice. They are not primary investment vehicles like your 401K or an IRA. It doesn’t need to appreciate 20 percent a year for us to enjoy the “wealth effect.” The appreciation rate on a home, like the tax benefits are contributing factors to owning one but I suspect the many other benefits are more important if by circumstance we had neither appreciation nor tax deductions. Home owners will continue to feel this so called “wealth effect” because they own their own home not because it has recently become an ATM machine. The glass is still more than half full when it comes to owning a home in California and should be pointed out to the folks who study such.
posted by Ken Calhoon at 10:59 AM
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