The get-rich-quick "flippers" that helped drive the market up beyond what people could afford for actual homes to live in can go to hell.
The market is the market - it won't go any higher than buyers will pay, or lenders will loan. The flippers didn't create a market increase, they simply took advantage of a market opportunity.
As for homes being higher than people can afford, no. That's a false concept based on our ingrained (and potentially disastrous) "consumerism" mentality. The problem isn't homes that are "too high", it's people who think they have to have more home than they can pay for. They will mortgage themselves to the eyeballs to get into the "house they can afford" then blame everyone else for their financial troubles. A house is a house and a price is a price. Whether or not it is "too high" is totally dependent on the buyer's willingness to be financially honest with themselves.
Brad
And in this area, a tiny "starter house" of about 1200 sq feet or less is $300k. Anything less than that gets you a "needs work" shack in an area that may include crack dealers.
The disparity between middle class income and housing meant for the "middle class" is extremely wide.
Such is the nature of the marketplace. When lots of people bid against each other for a limited commodity, prices will naturally rise. Get pissed about it if you want, but what's the point? You may as well get pissed at the weather.
I'm growing awfully tired of people expecting life to be a piece of cake, and expecting to have everything their hearts desire wrapped up and delivered on a silver platter. Luxuriously large houses in major metropolitan areas are NOT going to be cheap. Why on earth would anyone expect otherwise?
Price, size, or location: pick any two. There are plenty of new, clean, large, comfortable houses available for middle class prices. But they aren't located in the high-demand urban areas. There are affordable houses in safe, respectable urban areas, but they aren't very big. If you want a mansion in the best neighborhood, it's gonna cost you big bucks.
And in this area, a tiny "starter house" of about 1200 sq feet or less is $300k. Anything less than that gets you a "needs work" shack in an area that may include crack dealers.
The disparity between middle class income and housing meant for the "middle class" is extremely wide.
That I can agree with, the average household income where I live is 50-60k average decent home is $200k. Anything below $135k is going to need at least $40-50k worth of work or is so small you'd go nuts by yourself in it.
-C
This is a prime example of the problem. People have somehow gotten it in their heads that they "need" a large residence, else they'll "go nuts" or suffer some other calamity. It's pure BS. I live in a 400 square foot apartment, and I am perfectly comfortable. I live in the exact neighborhood I want to live in, and I don't have to pay an arm and a leg to do it. It's a matter of choices, priorities, and reasonably/rational expectations.
Everyone in America seems to have vastly overestimated how much residence they "need". Worse, they also seem to think they're entitled to have this unreasonably high "need" met cheaply and easily. When they find that reality differs from their unreasonable expectations, they automatically blame reality. If they can't live in a cush home in the best neighborhood for a cheap monthly payment, then obviously there's a problem with the market, or with the system, or with the government.
At root it's an attitude problem, not a financial problem.