Housing Market

I understand the housing boom now. The naughties thing to do is to resign yourself to never paying off the mortgage. Paying off the mortgage, burning the note, it’s all so passé. If your attitude is that the mortgage is something to reduce as quickly as possible, you’re going to shop dispassionately, with a severe eye towards every penny. If however the idea is to act as a bank, to play the borrow from Jim, lend to Paul game, then price still has importance but it’s not a penny-pinching point – you’re going to get the house of your dreams, for a lot more than you can ‘afford’ (per the traditional thinking), and you’re not going to quibble over a few thousand bucks. Multiply this thinking times a few thousand consumers and you’ve got a willingness to pay more – that phantom effect on the traditional supply/demand dichotomy.

- M. Oropeza


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