Is our housing market going to raise unemployment in China?

Implications: We’re 300 million people out of a world population of 6.5 billion. We control 1/5 of the world’s economy and we’re the world’s biggest importer. Everybody in the rest of the world who could has funded our recent deficits. We’ve consumed our way into a weak dollar. The good news is that we’ve made other economies rich in so doing. They’re ready to bail us out by buying the good stuff to play with and building the infrastructure or cleaning up the mess they’ve made in supplying our needs and wants. Best yet, they’re going to buy the goods and services to do so from us. Some of us are going to retreat to less expensive housing and automobiles while they catch up.

Analysis:

Analysts (real estate brokers) in some media say sellers are unrealistic about housing prices while at the same time being quoted elsewhere as touting the investment value of the home as a buy now. Product priced originally at the upper end of the production model in some Phoenix markets at above $ 600,000 is now having trouble attracting buyers at $ 500,000. Even the NRA forecasts a fall in prices in 2007 after claiming that home values haven’t fallen for 38 years. The average home price in California is now about $ 565,000.This number is 2 ½ times the national average while the per capita income is only 7 % higher than the national average. Sacramento, other Central Valley cities and the Inland Empire are suffering as the result of the construction boom. San Diego is losing population and OrangeCounty is the king of the sub-prime market as it fails. Los Angeles city housing costs are about 90 % of the median income as the have’s and have-nots there are further differentiated. Home construction prices are up about 8 % over a year ago as tile, concrete and copper costs are cited. Las Vegas and other parts of Nevada hold some of the biggest concentrations of sub-prime loans. Miami, the balance of Florida, the valley border communities at McAllen/Edinburg/Mission, Houston, Dallas, Memphis, Louisiana, the northern Virginia communities and some of the feeder communities west of New York city have sub-prime concentrations and delinquencies ranging up to over 20%.KB Homes says the housing market is going to get worse and, if I remember right, Lennar doesn’t know how to give revenue guidance to the investment market.

It seems to all be confusing stuff eliminating a clear prediction as to the individual components of the near economic future. The overall answer though is that we’re going to give China and India and Western Europe and the old USSR countries and the Middle East and the Commonwealth countries and Japan et al their turn while we moderate our consumption. We’re going to eliminate the excesses and redundancies in our housing, automobile and consumer industries. We’ll adjust since this society makes some really weird conditions seem glamorous. Maudlin is not our middle name. While we’re adjusting, we’ll sell the rest of the world our reduced circumstances as being style since we are a nation of attractive young (and old) people. As differentiated from other periods, our world neighbors can pull the trigger with their financial resources now as full-fledged partners. They’ll bail us out with their enterprise, I believe.