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URL:  http://boards.fool.com/home-prices-need-to-fall-relative-to-wages-27060761.aspx

Subject:  Re: From The No D'uh Department, Bailout Won't W Date:  10/5/2008  12:41 PM
Author:  Milligram46 Number:  257745 of 479729

Home prices need to fall (relative to wages) because most homes are just too darned expensive. If people can't buy them, no one can sell them.

Bingo! I caught a soundbite from Sarah Palin in the VP debate that eluded to this very point. Basically she said people were convinced that they could get a $300K mortgage when all they could afford was a $100K mortgage -- ahhh -- but appraisers and the real estate industry inflated the values of property so much and so quickly as the flippers and investors gobbled up property that the $300K mortgage payment that they got talked into to buy a $300K house, that is probably only worth $150K. Now it doesn't change the fact that being able to only qualify for $100K means they shouldn't have bought a house in the first place, but for those who bought the $300K house and do the right thing, cut slash, and find every extra penny to