Replies to post #76243 on Intel Corp (INTC)

[Sarmad]

>> Something puzzles me. If we have a glut of empty unsold houses,

There was was a glut of unoccupied housing units. Especially back in '06. Recently, this glut has been amplified by newly-impovershed young people returning to their parents home after losing their employment. Also many undocumented immigrants moved back to Mexico from Nevada, Arizona, and Calif.

>> Any way you count it, we have too many houses for the number of available families.

That's where time comes in. Housing stock becomes unlivable at the rate of 1%-2% per year. Even if there were a couple of million excess housing units, the least habitable of them will need to be demolished soon. So that problem takes care of itself.

[The Duke of URL]

"Something puzzles me. If we have a glut of empty unsold houses, where did the people go?"

In theory your trepidation is correct, but as a practical matter, the same laugh a minute banks that brought you that glut in the single family dwelling market also financed boat loads of apartments and condos, and got Fannie Mae to declare $3000/month per apartment houses classed as low income housing and therefore could buy the paper and sell a tranche to you.

As a practical matter the monthly expected rent of the apartment or monthly payment on the condo was taken as a derivative of the debt service amounts of residential houses.

So, if you look at the amount of people who want to buy a house with the amount of housing available there is no "glut".

This same test, of course is true of Ferrari's and yachts until the real price is considered. On the other hand if the government will pay the monthlies, then there will be a line for Ferrari's.