It’s worth reading the whole thing, but here is an excerpt from The Washington Monthly:

Why home prices are about to plummet-
and take the recovery with them

. . . Truth is, in most of the country there’s no housing bubble. Perhaps the crucial ratio from which economists determine whether housing markets are out of whack is the ratio of home prices to annual income. In most of the country, it is modest, 2.4:1 in Wisconsin, 2.2:1 in Kentucky, 2.9:1 in Illinois.

Only in about 20 metro areas, mostly located in eight states, does the relationship of home price to income defy logic. The bad news is that those areas contain roughly half the housing wealth of the country. In California, the price of a home stands at 8.3 times the annual family income of its occupants; in Massachusetts, the ratio is 5.9:1; in Hawaii, a stunning, 10.1:1. To some extent, there are sound and basic economic reasons for this anomaly: supply and demand. Salaries in these areas have been going up faster than in the nation as a whole. The other is supply: These metro areas are “built out,” with zoning ordinances that limit the ability of developers to add new homes. But at some point, incomes simply can’t sustain the prices. That point has now been reached. In California, a middle-class family with two earners each making $50,000 a year now owns, on average, an $830,000 home. In the late 80s, the last time these eight states saw price-to-income ratios this high, the real estate market collapsed.


Tom Reingold: ‘Friday’s graphic would have made its point just as well if it had been accurate.’

Alan Flippen: ‘Turkey, Iran and everything north and east of them are not Arab countries (though they are Muslim). Though in fairness, the graphic left out Tunisia, Algeria and Morocco, which are part-Arab, as well as Muslim.’

Scott Nicol:Here’s a more accurate map.’

Steven Schatz: ‘The only change I would make is to the caption, which should be, ‘End the Unjust Jewish Occupation of Moslem Land.’ (My wife, being Turkish by birth, has been very helpful to my understanding of all this.)’

Tom O’Malley: ‘Hmm. So, by that logic, would it be okay if I moved into your dining room? It’s only a small part of your house. I have total, unending sympathy for the horrors the Jewish people have endured. And yes, what is now Israel is their homeland. But I think that graphic ignores much of the reality of the situation. Does being less than 100% pro-Zionist make one anti-Semitic? I don’t think so. I hope not.’

Srikanth: ‘A slice of California as a Jewish homeland in 1948 would have been a perfect gift as well. Would have been interesting to see the American reaction to that. Ever wondered why was not a piece of Poland/Germany chosen for the homeland while they were being sliced up between the superpowers? (After all, that’s where the maximum atrocities against Jews were committed, not Palestine.) Anyway, might rules…until the next turn of the tide.’

John Seiffer: ‘A graphic like this has a polarizing effect. This is great for preaching to the converted but not so great at changing minds.’

☞ Polarize, I do not want to do.


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