Re: Urban Affordable Cooperative Cohousing Communities.
From: Josh Sharp (cohousinglistthesharpfamily.org)
Date: Wed, 11 Feb 2009 06:15:34 -0800 (PST)
On Feb 8, 2009, at 11:36 AM, Sharon Villines wrote:



On Feb 8, 2009, at 10:48 AM, Racheli Gai wrote:

Sharon wrote (in part):

If one's investment doesn't increase in value, one can never move.
Unless one has other forms of income that do increase.

I think that would only be true in the context of an economy in
which housing prices keep rising.  If they are stable, or going
down, it isn't necessary for one's own house to gain in value.

If the value of your house stays the same or goes down, the other
house prices will as well. The important thing for most people is to
maintain the value of their investment relative to other investments
so they can move if they need/want to. What is happening now is that
no one is moving because their house is now worth less than when they
bought it. Those who bought at the peak cannot afford the loss.

A $400,00 mortgage on a house one bought for $450,000 but is now worth
$350,000 or less, as one young couple has in our community has, is a
real problem.

In a normal market with even small increases, one at least stays
equal. If they had purchased shares in a coop 5 years ago and there
was no growth in the value of their shares, they would not be able to
buy another house or shares in another coop unless they bought
something smaller. They would not have the increase of 3% a year to
invest elsewhere.

It's all well and good to want housing prices to stay low so others
with small incomes can move in, but a growing family would not be
building enough wealth to grow into other housing.

Sharon.
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Sharon,

I would like to offer that your explanation, though the current norm, may be based on thinking that has, in part, led to the economic troubles we face. That is, that home prices will continue to increase, indefinitely. May I also offer a link to a web site that has some very good information on this matter:

http://www.chrismartenson.com/crashcourse

Thanks,
Josh.

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