Consumer confidence vs House Prices

I for one believe that most housing in the US is way over-priced. I'm currently living in KC and I'm seeing some "reasonable" prices. But I think it's worth noting that I'm making twice the median income and I can't see buying anything out here.

That's right, my wife doesn't work, so together, we make the median income for a two-person family and the cost of owning our own place is prohibitive. Of course, house prices are dropping, which makes me feel great, maybe I'll be able to afford one soon, but it looks like people aren't. I just found this graph on swivel (which is a pretty cool site BTW).



Of course, in the grand world of causation vs correlation, I'm going to chalk up the drop in confidence to more factors than just dropping house prices. If anything, it's likely the economy in general mixed with a healthy dose of "back-to-reality". For great helping of "back-to-reality", check out this post on MDJ:

California couple, family of 8, 100k / year:

• No medical insurance for the themselves OR the kids.
• $135,000 in credit card debt.
• Two mortgages totaling $658,000.
• Large mortgage with payments of $1800/month, but payments will increase to $3300/month in a few months.
• They have 3 cars, 2 of which are leased, the other one they own. The cost is $1700/month.
• Wife spends $300-$400/month at Starbucks (It was the wifes morning routine).
• $60/week on tanning and manicures
• $4k on hair extensions in the past 2 years.
• Constantly shopping.
• The wife would regularly buy brand new clothes for the kids, then have a garage sale a month later to sell the “used” items at pennies to the dollar. (This one blew me away)

Scary stuff.

Maybe it's time to practice "positive cash-flow techniques". Of course, YMMV.