{"id":13252,"date":"2010-09-15T08:34:04","date_gmt":"2010-09-15T15:34:04","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=13252"},"modified":"2010-09-15T08:34:08","modified_gmt":"2010-09-15T15:34:08","slug":"joel-kotkin-why-housing-will-come-back","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/13252\/joel-kotkin-why-housing-will-come-back\/","title":{"rendered":"Joel Kotkin: Why housing will come back."},"content":{"rendered":"

Urban savant Joel Kotkin in Forbes<\/em> magazine:<\/a><\/p>\n

What we are going through now is not a sea change but a correction from insane government and business practices. The rise in homeownership from 44% in 1944 to nearly 70% at the height of the bubble reflected a great social democratic achievement. But by the mid-2000s government attempts to expand ownership–eagerly embraced by Wall Street speculators–brought in buyers who would have historically been disqualified.<\/p>\n

In some markets, prices exploded as people moved up too quickly into ever more expensive housing. Housing inflation was further exacerbated by “smart growth” policies, which limited new home construction in suburban areas and instead promoted dense, “transit oriented” housing with limited market appeal and economic logic.<\/p>\n

Rather than artificially constraining supply and protecting irresponsible borrowers, we should let nature take its course. Home values need to readjust historic balance between incomes and prices. Over the past 60 years, notes demographer Wendell Cox, it took two to three years or less of median household income to purchase a median-priced home. At the peak of the boom, that ratio had ballooned to 4.6.<\/p>\n

The disequilibrium was the worst in regions like Los Angeles, Las Vegas, San Bernardino-Riverside and Miami. At the peak of the bubble, between 2006 and 2008, according to the National Homebuilders Association- Wells Fargo “Housing Opportunity Index,” barely 2% of families with a median income households in Los Angeles could afford to buy a median priced home; even in the traditionally affordable Riverside area, the number was roughly 7%. In Miami, barely 10% could afford such a purchase; in Las Vegas, often seen as one of the cheaper markets, only 15%.<\/p>\n

What a difference a market correction makes. The affordability number for Los Angeles is now 34%, 17 times better than two years ago, while Riverside is now near 70%. Miami’s affordability picture has improved to over 60% while in Las Vegas, it’s back over 80%.<\/p>\n

These lower prices–not Wall Street or federal gimmickry–will lure new buyers to the places that some new urbanists have predicted will be “the next slums.” Already there’s evidence in places like Miami of a renewed interest in Read more<\/a><\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

Urban savant Joel Kotkin in Forbes magazine: What we are going through now is not a sea change but a correction from insane government and business practices. The rise in homeownership from 44% in 1944 to nearly 70% at the height of the bubble reflected a great social democratic achievement. But by the mid-2000s government […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[212,29,6,5],"tags":[],"class_list":{"0":"post-13252","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-flourishing","7":"category-group-therapy","8":"category-marketing","9":"category-real-estate","11":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":5621,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5621\/can-california-cultivate-anything-better-than-the-seeds-of-its-own-destruction-urbanologist-joel-kotkin-tallies-the-states-ills\/","url_meta":{"origin":13252,"position":0},"title":"Can California cultivate anything better than the seeds of its own destruction? Urbanologist Joel Kotkin tallies the state’s ills","author":"Greg Swann","date":"November 16, 2008","format":false,"excerpt":"Joel Kotkin on the rise and fall of the Golden State:Twenty-five years ago, along with another young journalist, I coauthored a book called California, Inc. about our adopted home state. The book described \u201cCalifornia\u2019s rise to economic, political, and cultural ascendancy.\u201d As relative newcomers at the time, we saw California\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":17333,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17333\/overnight-news-heard-any-good-jokes-lately\/","url_meta":{"origin":13252,"position":1},"title":"Overnight News: \u201cHeard any good jokes lately?\u201d","author":"Greg Swann","date":"October 20, 2020","format":false,"excerpt":"Can't seem to get a grip on the news? Can't quite put your finger on the problem? Feeling overexposed, despite your isolation? We've got you covered \u2013 everything but your lap top: CNBC: Homebuilder sentiment sets another record high in October. The Valley of the Ever-Fecund Sun is festooned with\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"Ya think it's easy?","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/BHBNewTopImage-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":17101,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17101\/overnight-news-so-whats-up-with-the-listings-that-didnt-close\/","url_meta":{"origin":13252,"position":2},"title":"Overnight News: So what\u2019s up with the listings that DIDN\u2019T\u00a0close?","author":"Greg Swann","date":"September 23, 2020","format":false,"excerpt":"When you report the great news about closed listings, what are you leaving out? News about the listings that didn't close. There is huge demand for suburban, exurban and rural housing because demand has cratered for urban housing. Why? Mass exodus from vertical to horizontal. Why? Urban rioting. See that?\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/BHBNewTopImage-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":2840,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2840\/urbanologist-joel-kotkin-why-growth-oriented-cities-like-houston-phoenix-and-atlanta-reflect-the-future-of-global-commerce\/","url_meta":{"origin":13252,"position":3},"title":"Urbanologist Joel Kotkin: Why growth-oriented cities like Houston, Phoenix and Atlanta reflect the future of global commerce","author":"Greg Swann","date":"March 27, 2008","format":false,"excerpt":"Joel Kotkin is the only American urbanologist who can tolerate actual living human beings. In consequence, he can write about the organic growth of cities as they really are, rather than as he might remake them with enough tax money and firepower. This is a long extract from a much\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":18481,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/18481\/overnight-news-where-will-the-real-estate-market-do-better-going-forward-where-the-grasshoppers-arent\/","url_meta":{"origin":13252,"position":4},"title":"Overnight News: Where will the real estate market do better, going forward? Where the Grasshoppers aren’t.","author":"Greg Swann","date":"September 16, 2021","format":false,"excerpt":"Is the real estate market cooling? Not where I work. To the contrary, good news just blew in yesterday from California: That state's few remaining sane voters will be packing up and leaving, with The Tarnished State becoming America's largest Grasshopper sanctuary. I can't tell if there is actually a\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"Ya think it's easy?","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/BHBNewTopImage-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":18156,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/18156\/overnight-news-single-family-home-buyers-are-coming-from-somewhere-whats-going-on-with-the-housing-they-fled\/","url_meta":{"origin":13252,"position":5},"title":"Overnight News: Single-family home buyers are coming from somewhere. What\u2019s going on with the housing they\u00a0fled?","author":"Greg Swann","date":"May 19, 2021","format":false,"excerpt":"In 2006, we sold bedrooms without beds: Acres and acres of homes with no ready residents. Totally a cargo cult, of course: Houses are valuable even with no one to occupy them. But for a while you could flip a new build at COE for $50k more than the contract\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"Ya think it's easy?","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/BHBNewTopImage-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/13252","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=13252"}],"version-history":[{"count":1,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/13252\/revisions"}],"predecessor-version":[{"id":13253,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/13252\/revisions\/13253"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=13252"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=13252"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=13252"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}