Prediction - Solution to Housing Affordability is ...

... a forced crash of the market.

Yes, I hate to say it, but the only real solution to housing affordability is that ALL housing becomes cheaper and the only way that will happen if we have a massive crash in prices.

Hey, we all know it to be true. Affordability needs to be $100-200K cheaper than it currently is. How do you get there? Well, almost ALL options have the same affect - they force down prices EVERYWHERE.

If you flood the market with cheap land, what happens? Everyone goes and buys the cheap stuff, forcing it higher but in doing so, they desert the current market, forcing it lower. So, we all KNOW that govts WON'T provide cheap land because they'll be accused of causing the crash.

So, all I can assume is that they're simply waiting for it to implode - which is true of any market (govt doesn't go in and buy shares to keep the stock market happy) - no, the market will correct on its own, and I suspect that's what we're seeing know - encouraged by govt. We'll soon hit a tipping point, we'll have our own sub-prime, the economy will slow, China will stop spending, the US will collapse. Whatever the cause, it will trigger a huge problem in housing and the market will collapse.

Actually, that creates an interesting problem. If people start baling out of mortgages, they still need a roof over their heads - so they rent. But the rental market is already saturated and some probably can't afford the rents. So that will either force some investment properties to become fragile or banks will be forced into the property management market to recoup SOME income on their failed investments. Each event will spiral down on the other.

Fun, fun, fun...