Quoting Moody’s for anything other than advice on how to stay out of jail is probably a bad idea. Who cares if house prices have gone from 24 months pay to 19 months pay? If disposable income has shrunk and if you have less than 100% confidence that you’ll have a job in 12 months, then yesteryear’s metrics don’t really tell us anything.
I just quoted a snippet of the short article. While it doesn’t appear to be an industry shill piece, there’s no valuable analysis there. Kind of like when you’re sitting around the card table drinking beer, smoking cigars, and talking about how to win whatever current war is going on –no value whatsoever.
“By SIMON CONSTABLE
First, let’s recap the economic signs a bottom is close.
Houses Are a Good Deal
Housing is the most affordable it has been in decades, according to analysts at Moody’s Analytics. Nationally, the cost of a house is the equivalent of about 19 months of total pay for an average family, the lowest level in 35 years. Prices usually average close to two years’ pay, although that varies nationally.
“Housing prices will probably bottom in 2011,” says Scott Simon, a managing director at money-management firm Pimco in Newport Beach, Calif.
Mr. Simon says prices might dip another 5%. Still, in the scheme of things, that’s small.”
Also remember that borrowing money to buy a house can still be risky.