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Here’s what we know about the housing market: You need some place to live and you have increasingly crappy options.
Renting, it turns out, is basically still expensive. If you’re inclined to buy a home, first check out David Leonhardt’s fantastic rent vs buy calculator, and then gird yourself to contend with a stream of ominous news. You can start with today’s Case-Shiller results (PDF), which indicate that home prices fell back to 2003 levels in January.
Of course, you won’t make your home-buying decisions based on national averages. No, Discerning Potential Home Buyer, you know that all real estate is local and can see, for example, that home prices in Atlanta fell 14.8% in the last year and that even coastal-elite-friendly enclaves like New York and San Francisco fell 2.9% and 5.9% respectively.
There’s been no shortage of housing bottom calls of late, including from Calculated Risk, Barron’s, Karl Smith at Modeled Behavior and a sometime-this-year prediction from BofA Merrill Lynch. (Please ignore Jim Cramer’s housing bottom call from June 2009.)
A market bottoming-out never intuitively feels like a buying opportunity, certainly not with 28% of all mortgaged homes underwater, reports of rising foreclosures in some of the country’s most populous areas and Shiller himself recently saying he doesn’t see “any reason to think that prices are going to start heading up dramatically now.”
So renters can console themselves with the fact that homes could very well be terrible investments, especially if your beloved hometown has “insufficient permanent employment to justify a constant level of demand for new housing stock.” One man’s perfectly timed purchase is another man’s financially crippling, several-hundred-thousand-dollar money pit.
On that note of searing optimism, on to today’s links.
Toobin: Obamacare “looks like it’s going to be struck down” – HuffPost
It’s up to Kennedy, and don’t rush to judgment on the court’s ruling – SCOTUS Blog
The small-business lobby’s million-dollar legal assault against Obamacare – WSJ
Low taxes do not spur economic growth – Social Science Research Network
And, of course, there are many more links at Counterparties.