Monday, September 06, 2010

Should we be trying to save the housing market?

I think the countless mortgage modification programs designed to keep homeowners in their overpriced bungalows misses the point. We are faced with a staggering supply of homes and too few household formations or upwardly mobile families to absorb that supply.

These mortgage modification programs now seemed to be aimed less at the people that are unable to make their payment and increasingly at those that are just underwater. Having negative equity in a home is a balance sheet item and frankly, that is a separate issue from whether or not you have the cash flow to cover the monthly mortgage. If you earn $85k and have a $200k mortgage on a house you bought in 2007 for $250k, I'm not sure that it is the government's job to bail you out because that home is now worth $150k. Home ownership is not a one way investment and prices can and should fall from time to time. If we start insuring against private loses then we'll have to add that to our list of big issues.

Housing has probably approached a bottom in many ultra bubbly areas, but many metro markets still seem too high for the current economic environment. The idea of wrapping a $10-$20k/year real estate tax bill (that might seem high, but that's the norm in middle/upper class neighborhoods in the Northeast and it's growing at 5%/yr) around my neck for the next 30 years in an asset that has declining utility seems pretty unappealing.

In honor of the first day of school I thought it would be fun to offer up some words you are probably mispronouncing via

Chipotle: It's a pepper, it's a mayonnaise flavoring, it's a restaurant chain beloved by soccer moms across the US. And it's NOT pronounced "chip-ole-tee." It's chee-POHT-lay.

Sudoku: This is phonetic, but people must be intimidated by the vowels. It's soo-DOE-koo.

Açaí: Just like in French or Spanish, the "squiggly C" cedilla indicates that it's soft. It's also three syllables: ah-sah-EE.

Espresso: "Express" is a type of train or a store for women (and slightly girlish men). There is no "ex" in ess-PRESS-o.

Asterisk: The last syllable of this punctuation term should sound like the board game about war, not multiple people named Rick. It's ASS-ter-isk.

Gyro: OK, sure, a lot of people use the Americanization -- but you don't pronounce the L in "quesadilla." It's time to stop pronouncing the G. It's YEER-oh.

Ok, most of these are just words that I'd like certain members of my household to pronounce correctly but I thought I'd make the suggestion discretely via the blog :).

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