January 13, 2008

HousingPANIC Stupid Question of the Day

Where do you live?

How far (honestly!) do you think mark-to-market house prices have fallen from their peak as of today?

How far do you think they'll fall (in real prices - you'll need to adjust for Bernanke's destruction of the US dollar) peak to trough?

And what year do you think your market will hit bottom?


westwest888 said...

Virginia suburbs of DC:

- fallen over 10%
- mark-to-market (sell today): -20%
- "Value" investors will buy when value is -50%

For any real estate genius that got in the game within the last 5 years, their carrying cost is double the rent. If it comes down 50%, it is again a "value".

Anonymous said...

nationally we'll see a 25% decline overall, with some bubble markets going down as much as 40-50%

bottom won't be reached for 18 months at least

Anonymous said...

I live in the San Fernando valley in Los Angeles.
Seriously, there are sellers still pricing tiny 2 bedroom Shit boxes here at around the half a million dollar mark. Asking prices are completely out of whack with income. We have a loooooooooooooooooong way to go!

Ed said...

Where do you live?
Suburban Atlanta

How far (honestly!) do you think mark-to-market house prices have fallen from their peak as of today?
The peak here came only last summer. Prices are down 10%. Prices are falling faster in the outer suburbs like Canton or Cumming, (yes Cumming is an actual name of a town) The closer you get to the city the less of fall so far.

How far do you think they'll fall (in real prices - you'll need to adjust for Bernanke's destruction of the US dollar) peak to trough?

nominal 25%,real who knows?

And what year do you think your market will hit bottom?
late 2009


Gabor said...

Living in Fort Lauderdale, FL. Renting a 1 br here for 1236/mo. I have access to 3 pools and the intercoastal. There are houses 1 block away selling for 600K that are maybe twice the size of my place with no pool. I think I might pay 200K for them tops. So what is that, 66% decline? People are leaving FL because of all the hurricanes, heat, crime, traffic. I still rememver all the people who paid 200K for a 1br condo telling me that we are the next Manhattan. I think this place is going to get real bad. There is a cop killed here every other day it seems and it's getting worse. I still love the weather though, so I may buy something in about 2 years.

W.C. Varones said...

Beach area of San Diego. I pay $3800 rent for a house that is much nicer than the one next door that is for sale for $2.1 million.

We've got at least 20% to go.

Anonymous said...

25% for condo conversions in the Orlando area.

Anonymous said...

Prices are still going up in Oklahoma. It's different here!

sandman said...

Downtown Boston.

Prices here have dropped ~5% in the city. The suburbs are deeper ~10%.

The overall decline will be 50%+.

One part of my rationale is anecdotal. A good friend and collegue bought a 1BR in 1996 in downtown near where I live today. Nice building. Had garage parking. Had a concierge. Had a pool. Yep. You read that right.

He paid 190K and said he got a pretty good deal (~$200per SF). Within 2 years that same 1BR was going for 400K. By 2006, people wanted 650K. It needs to drop by at least half to be in line with normal prices.

In terms of the P/E factor, I live in quite a nice building with many amenities. If I had to buy my unit, it would cost more than double my rent. The same is true for the unit I described above.

The bottom will be in the end of 2009/beginning of 2010.

You'll know we've hit bottom when the sheeple who said "real estate only goes up", turns to you and say... "I'd be cautious about buying real estate... you can get burned". That's the bottom.

However, I don't think prices will "recover" for another 10 years.

It will take some time for people to forget their bad experience.

Alex3191 said...

I'm living in Chicago (not suburb).

Today - 5% off the peak.

Total fall estimate - 30% off.

Rock bottom - 2012 (5more years).

I hate to disappoint you guys ... no real crash yet here

Anti-Consumer said...

ok...basically since 1890 it has taken approx 3 to 5 years for the home values to level out once they have a signifigant dip...I'm in Sugar Land, Texas (rated the 3rd best place to live, whatever that means or who ever has a buddy writing a book about places to live, LOL) The funny thing is that most everyone I talk to doesn't even have a clue about the picture, they mostly think that it is a good time to buy since the prices are so good...they just don't realize there is no way the home values will level off at this point with all the other factors at play. Many hoses have been on the market for many days, houses that would sell for 100 dollars a foot are now in the 70' & 80's and won't sell! I think realistically the home values here will sink about 30% if we have a recession and likely 45-50% if we have a depression...if you rent, wait until housing levels out for at least 6 months. If you are selling, then get very aggressive with your selling price because the time is now...after selling just rent, who cares, take a break. Off subject, adjust your lifestyle now to accomodate the future, whatever that is...either way it's a good idea! Just my thoughts! Best Regards,

anthonycarusoSTL said...

I'm in St. Louis City, a proud renter...got a 2 bed, 2 bath, 1500 sq. ft. flat near the botanical gardens for $600/mo. Am also in the mortgage business. It's weird that in the city, most values (which were never hugely inflated anyway) have held, whereas in the counties (St. Louis county, Jefferson County,) I am seeing people that have lost 20 - 30% already, and are close to, if not already upside down on their notes.

I was properly trained in this industry, and know how to actually pre-qualify someone using methods other than the "fog a mirror" method that prevailed over the last few years, and am OK to weather this...but I know many here who aren't, and have had the FBI kick their doors in.

desert rat said...

Total denial here in 81521 (Fruita, CO). Newspapers crow about the booming RE market and unemployment is 3%. Last year home prices appreciated 15%-20%.


Properties over $400K aren't selling anymore. Several restaurants closed at the end of the year. IMO the rug is starting to unravel at the edges.

wc said...

I'd say NYC suburbs are about the same as 1st comment for VA suburbs. Though I'm not sure that they'll drop 50% overall - I would guess 30-40% - even though NY realtors are still telling everyone how wonderful the market still is - and I predict a bottom in Fall of '09/Winter '10

BearClaw said...

Edmonton, Alberta

- fallen about 10%
- mark to market -15%
- bottom unknown


Stuck in So Pa said...

Where do you live?

Southern York County, Pennsylvania
How far (honestly!) do you think mark-to-market house prices have fallen from their peak as of today?

House prices here are right on the money for used homes, new are outrageous, but there are not that many of them percentage wise. No run up at all, considering that Bubble Baltimore is a half hour away. The Balt/DC crowd did import their housing inflation into the new home sales, but our one high-end development is looking pretty vacant!
The credit bubble is starting to hit home, not much yet, but more to follow. A small, older home in town that had a bed sheet on the side of the house pleading "Make Any Offer" burned out almost a year ago has still not been rebuilt, and I have two blighted/abandoned dwellings on my road.

How far do you think they'll fall (in real prices - you'll need to adjust for Bernanke's destruction of the US dollar) peak to trough?

Again, no run up, no collapse, they just sit there not selling. Never a lot of turnover in this sleepy area, so the people that can't sell usually don't HAVE to sell, and can just sit on them until the market rebounds, whenever that comes, if in our lifetimes!

And what year do you think your market will hit bottom?

2012 looks good, that's the Mayan predicted end of time, maybe the U.S.'s too!

geeski said...


* fallen 10-15% already, outlying areas even more
* predict another 10% decline this year
* recovery years away, since builder still building

ignore the pundits that say phoenix will recover faster because everyone is moving here. people are moving here, but not at the rate they used to. plus, if you can't sell your house in the midwest, how can you expect to buy in phoenix? the days of easy money, bridge loans, etc. are long gone.

Anonymous said...

prices in south central texas are probably flat.......no change......

Anonymous said...

I'm in Sugar Land, Texas (rated the 3rd best place to live, whatever that means or who ever has a buddy writing a book about places to live, LOL)<<<

gads, sugarland is a great place to live? who is telling this lie?

The951 said...

I'm in the Inland Empire in Southern California. I'd say prices have fallen 40%. A home a few blocks away from me was listed at $303K the other day. 18 months ago, they would have listed it at $500K or a tad higher.

And I'm saying this not out of wishful thinking, but I do think 2008 could be the bottom around here. As the day of judgement starts coming for homedebtors in Orange, Los Angeles, and other surrounding counties, I expect them to come live out here, since the IE is now so cheap by comparison. In the past month I have spoken to two Orange Countians who are planning to sell their homes at any price, and move into the better parts of Corona and Temecula. (They do exist.) Suddenly their priorities are changing -- that hour-long one-way commute doesn't seem so bad anymore. I guess a mortgage that's eating you alive can make those sort of changes in you.

stuckinthecity said...


In 2001-2, in Oriole Park (nice working class quiet hood) avg house was $220,000. Now that house is $400,000+. A gut job will cost you $360,000+.

Mind you the people there are mostly city workers making $40-75,000/ yr.

50% off at the slow, distant bottom. The avg Chicagoan is a stubborn pig headed fool and think their 900 sq ft shoe box is a castle.

Anonymous said...

This is amazing.

2 years ago I was prediciting that housing prices would fall by 30%-50% nominal and that it would take until 2009-2010 for it to level out at these new prices. Now the "conventional wisdom" is pretty much right on target for my 2 year old prediction.

I'm in the DC suburbs of MD (although also have owned condos in DC and VA-Arlington). I will stick with my predictions. I would think that in real terms the prices have dropped by about 20% already and we are looking at more like a 50% total drop in prices in real terms.

Anonymous said...

Thanks to HP for helping save 100's of thousands of dollars.After inheriting money in 2005 I looked into buying Real Estate.Not feeling comfortable buying when people in our area were buying houses sight unseen this site is one site that helped reinforce what I was feeling while the mainstream media was still cheerleading Real Estate.People in are area that bought have lost 100's of thousands of equity and prices still dropping.

Anonymous said...

Newport Beach California,
Prices have not dropped much at all. Maybe 5-10 percent.Most koolaid drinkers here think we are special here and will not be touched be the largest
RE crash in history.

The newport stay at home moms will be hooking to keep the life style going.

doubtful said...

the951 said -- "As the day of judgement starts coming for homedebtors in Orange, Los Angeles, and other surrounding counties, I expect them to come live out here, since the IE is now so cheap by comparison."

Dude ...

... that is total wishful thinking. If they can't sell for a decent price in Orange County they aren't going to buy in the IE and burn up the 'savings' in gas to commute! And the IE has always been cheap by comparison. What's changed now?

Lady Di said...

Orange County, California.

My home value has fallen 15% from peak so far. I expect it to go another 25%, to a 40% total decline, maybe even 50%.

We're screwed.

Anonymous said...

Live in NoVA, and luckily decided to lease instead of buy 2 years ago.

The community we live in SOLD OUT 2 years ago...houses went for 7-800,000 and townhouses for 650,000

Now, the houses are listing for 540, and the townhouses for $429,000 and the place is LOADED with foreclosures, no one even buying at those prices.

We really do want to buy, but with rent at half the price of a mortgage, and prices in freefall, it just dosent make sense!! (Even if Builder NV is making drastic price cuts, they just jack up the price of options and think they are pulling the wool over everyone's head)
Everyone agrees prices will be so much cheaper in the next 2 years.

Anonymous said...

Live in the MD Burbs.

There are more damn foreclosures here than almost anywhere else in the state, due in part to the demographics and large amt. of subprime loans going to people that had NO business buying a house they could never afford in their wildest dreams...even with a 1% rate.

2008 will be a bloodbath here--and prices will take another 25% haircut. I just hope part of Bush's "Stimulus pkg" will be to actually reward citizens with good credit, money to put down and a brain in their head this time.

Homeownership is NOT for everyone!!

Anonymous said...

Yep, good old PG County, MD! It's becoming a McMansion Ghetto faast.

Prices there will tank, no doubt about it.

Anonymous said...

San Diego has already dropped by 20-30% if you also include concessions and secret rebates. When it's all done with we'll be down 75% from the top. That's right, homes will be selling for 25% of what they sold for in Nov. of 2005. I'm a banker and it's going to get far uglier than even you people on this site can imagine.

michael said...

alexandria va, wife and i live in one bedroom condo:

DC metro area will be PWNED by the housing crash. well over 50%.

it got crazier here than most people realize.

Anonymous said...

im in phoenix and waiting for the guy who bought distressed housing in 2002 to sell distressed.... could be waiting a long time to see such a fall?

George L said...

I also live in the San Fernando valley in Los Angeles and prices have fallen at least 10% just in the last 4 months. for example, the house across the street from my building was 499k last summer. before the end of summer it went down to 459k, no takers. in the fall it went down to 409k and still nothing.checked the price again and it's now 375k! a nice 25% percent drop in less than a year. it's bank owned now.

home-debtors will get screwed even further when banks get desperate and start dumping this foreclosed homes that will really bring prices down further. at peak, homes in the valley were worth about 600k that's at least 180% up from 2001 prices when they were selling for 225k.


the valley is in a recession and going deeper into it because a lot of people here worked construction here and not just minorities.I've also seen and increase in police activity.there's an increase in domestic violence even in the "nicer" areas.

Frank@Scottsdale-Sucks.com said...

Newport Beach, CA - one of the subdivisions in the Newport Coast development - the house I live in sold for $1,200,000 at the peak.

Today the few that have sold have gone for around $800,000. That's a 33% drop, folks. And now sales are at a standstill and even the $800k listings can't move.

I expect it to bottom out around $400,000. A friend of mine who is an experienced r.e. investor (a real one, not a fliptard) swears by the $400k number. I figure that will happen sometime next year in 2009.

Our next-door neighbor who knows our landlords well (they used to live in this house) tell us they'd sell it to us for $750k, but I'll wait until $400k.

Average rent on this model had dropped to about $3,000, which on a 30-year fixed equates to about $400k.

01/20/2009 end of an error. said...

Colorado Springs

High end homes are down a minimum of 30% but aren't selling. I went to an open house near a rental I was looking at last month. Original price 550000 scratched out in pen on flyer to 500K. Before I could get out of the kitchen the realtor said they would consider 410K. Now this is a 4000sqft new home with a reasonable view. The rental was nicer for 1600 a month. 120X rent 192000. I don't think they will go there though rent has fallen due to people renting instead of selling. This house in 2010 will probably bring 300-325K

Overall houses are down about 30% and this will start to be reflected in the median as soon as homes start selling. Bottom will probably be 40% off because the houses are nice, taxes are low 2000a year on 400K and so is insurance.

The problem is not enough people with real incomes and way to many huge houses. I figure roughly 50% of all the houses in town are over 3000 sqft and cost 300K up even with the 30% haircut. Considering it takes 100K in salary and 60K down to buy a 300K house now it could get interesting in a town with a 43000 median salary. We probably have 25% of homes costing north of 500K and that market is dead 3-5 year supply.

Anonymous said...

Here in Honolulu, the prices haven't dropped yet. Sales have dropped off 50% from the 2005 peak, but inventory is not going up.

It still takes $800,000 to buy a house here, at least one which isn't a total shack.

Anonymous said...

Anonymous doubtful said...

the951 said -- "As the day of judgement starts coming for homedebtors in Orange, Los Angeles, and other surrounding counties, I expect them to come live out here, since the IE is now so cheap by comparison."

Dude ...

... that is total wishful thinking. If they can't sell for a decent price in Orange County they aren't going to buy in the IE and burn up the 'savings' in gas to commute! And the IE has always been cheap by comparison. What's changed now?

January 13, 2008 5:24 PM<<

oh come on now. the inland empire is toast too....good grief...

eric in vegas said...

Las Vegas

Prices are down 25-30% from peak. When we hit bottom prices in the best areas of town will be down 50-60% from peak and the crap areas will be down 75%.

Happy_in_Austin said...

Manor, TX (Austin Suburbs)

Austin had it's major real estate correction in the early 2000's after the Tech Bust.

I bought in the NE Austin suburbs in rural area getting ready to be gentrified and developed. Paid under $200K for 3000 square feet.

For me it was cheaper to buy plus I get interest and property tax deductions.

I have probably seen about a 10-15%increase in value since May '05. Austin overall saw about a 5% increase last year.

My guess is the metro area will be looking at a 5%-10% decline in 2008. It will probably be worse here in 2009 and 2010 when we start seeing the last wave of ARMs resetting.

Anonymous said...

1. DC Metro- Virginia
2. Some have fallen 30%, but its hard to say because it doesn't appear that anything is moving.
3. 2012, a few months after that last set of ARMs reset. Oh, but then the boomers will start taking their well-needed dirt naps and/or that Mayan calendar end of the world thing is going to happen.

DC and most of the people here can suck my newly shorn balls - nothing but egotistical douchebags.

Anonymous said...

new york city, we shall see a 30% decline based on slower wall street bonus growth and harder access to funds, also bonus money is coming in the form of stock rather than cash, and you cant buy property with stock certificates

alexgouk said...

I live in the UK, Deep rural, stone cottage.
I expect it to drop 25-30 percent in the next 3 years,

I couldn't give a toss, It's paid for and we want to live here. I don't care what it's worth

I have friends who have second mortgages and I am really sorry for them because they will soon be upside down

Vandal said...

Frederick country MD is starting to crumble fast, way too many townhouses. My street is a good example, 2 foreclosures have popped just in the last month. One is now an REO listed in the MLS for $50 to $70K below the equivalent units on the same street. A serious comp killer. (Search the street "cavenrock" in ZipRealty, 101 Cavenrock is the REO).

That REO is still nowhere near bottom. I bought my unit when the price was better than renting which is still more than $70K below the REO ($190K or $95/sq. ft).

Denial is still running rampant because two of the units on the street just went into MLS for bubble prices AFTER the REO hit.

It's only a matter of time before these prices start to drag down the Montgomery Country MD which is falsely being touted as "immune.

Vandal said...

Forgot to mention...a heads up to DC metro people...check out this article in the Wash Post...http://tinyurl.com/22mhbd

The whole DC area is now flagged as a "declining market" in by loan underwriters. This is effectively stopping %100 financing attempts.

Anonymous said...

Los Angeles (Harbor area)

Prices currently off 5-10% from the high.

However, sales are very slow, so it is a bit hard to actually know what real prices are. In particular, if you must sell fast, you will likely lose more than that.

My prediction is for another 25% fall, which will bottom out in 2010-2011.

Anonymous said...

I inherited a family home that Dad paid $40,000 for in 1964. If we loose 50% it will only be worth 2.5 million. I am so screwed.

Thank god I'm a big saver.

Anonymous said...

Suburbs East of Tampa

In my neighborhood, we're down approx. 35% based on the last sale in December. A pending sale has yet to close, but I'll go with 35%.

Ultimately, I think we will end up 40% below peak.

In real dollar terms, we're easily down over 50%, heading towards 60%.

Anonymous said...

Logan, Utah.

Houses have not fallen yet at all. Rents (avg $1200/mth for a piece of crap) are high than mortgages (avg. $900/mth). Not enough rentals and lots of houses for sale. Everybody wants to rent but their aren't enough houses to rent. Low wages make people not able to afford a new house but yet rents are still high. It's a college town with transient Professors and stacking 8 college kids per house that are keeping the rents high. I'd buy but I think the houses are too expensive for the $1200/mth they can bring in rent. The avg house price here is $190,000 but it should be more like $160,000 based on local salaries. Very weird. I hate living in a non-disclosure state!

Anonymous said...

Renter in Rhode Island here,
Prices are now down 10 to 20 + percent from the 2005 peak. Still, nothing is moving. The bank owned properties are now about 10 percent cheaper than those owned by locals, and falling. I have owned here several times, grew up here, and having sold a few years ago, I would say there is still at least another 30 percent to drop to get back to the norm. I would also think about the coming waves of property that will flood the market more when the baby boomers sell the house and retire. As for me, I've got popcorn, I'm watching.

Anonymous said...

I live in Easter Pa., Bethlehem, Lehigh Valley. 1 hour from NYC and 1 hour from Philly. Lot's of commuters into NY. Prices here are up 60% since '02. Nov, '06 through Nov, '07 pices up 6.3% with sales down 17%. We never had the run-up nor the crazy abuse of Option ARMS, speculators etc. Housing here was basically flat from '91-'02 so while we're up 60% in 5 years it's maybe 75% in the past 15. We went from a very low cost market to moderately priced. I'll never say it's different here but not all markets are the same. Areas with low wages, Phoenix, Florida, Central California will see 50%+ drops following 250% apreciation. Some areas I've been tracking have drops >40% already. We may see 10% decline here but it's still going up but much slower.

Anonymous said...

Another P.G. County (just inside the DC Beltway) renter checking in. Happened to see some "price reduced" listings today, and have noticed the beginnings of a decline (5-10%?)
Would love to see 50 - 75% unadjusted by the time it is all over - bubble prices ran up 150% or more.

kochevnik said...


M2M : -5%

Peak to trough :
Within 5 years they will be down 40% - back to mid to late 90's prices.

There is no bottom - prices will continue to fall into the 2020's.

You won't believe how bad things will be by then.

Anonymous said...

Our house in south riverside california appraised for $505,000 in March of 2007. We purchased in 2004 for $286,000. Our neighbors home(after being on the market for over a year) is bank-owned & it is now on the market for $287,000. I knew it was coming, but it's breathtaking! I figure it will go down to $150,000 when all is said & done.

doc1 said...

Suburbs of SLC, Utah

Another area where everyone thinks we're immune but no houses are selling and all the construction help (read illegals) have flooded OUT of the area (I know because I volunteer at a medical clinic for illegals ad homeless). Dozens of now abandoned luxury homes, some only partially completed. Lots of RE fraud in the news ("River Bottoms fraud"). Utah was a hotbed for Option Arm A toxic loans (9.5% of all those ever written were here in our small state) and that reset day is coming in a few years (2010 and 2011). So this is going to get bad. I say 2012 for the bottom here and I agree with the above foreshadowing 75% declines. Utah hitorically lags behind the rest of the West and then recessions/depressions last commensurately longer here. It's coming Utahns -- get ready!

Anonymous said...

The Inland Empire is going to be an inferno.

Its crashing hard and we have only just begun.

Housing is one of several problems that we have out here.

I glanced at the classifieds and a landlord was giving away 42" plasma screen tvs to sign a lease at the apartment complex. I saw another one that offered 4 months free rent and others that offered 1-2 months free rent.

Rents are starting to fall due to oversupply.

AUCTIONS are also becoming prevalent along with mass garage sales and estate sales.


Boomba said...

Anonymous said...
I inherited a family home that Dad paid $40,000 for in 1964. If we loose 50% it will only be worth 2.5 million. I am so screwed.

I would't doubt it after your $2,000,000 HELOC

Anonymous said...

Montgomery County, MD, renter

Prices are declining some but it seems many sellers are stubborn and haven't realized they are losing by not negotiating price. I hope to see an additional 15% decline over the next year.

Anonymous said...

Northside of Chicago: nice relatively safe (somewhat yuppified) neighborhood. The 2BR Condo on the corner has been sitting at 350K since September; down the street is a 1BR for 190K that's been sitting since at least June (both w/o parking.) Still pretty stubborn here, but no one's buying.

Bob Reno said...

Lansing, Michigan

Hard to tell, so few houses are selling, but a good guess is 30 to 40% in some cases.

Biggest problems? Builders still unloading stock . . . and still finishing subdivisions in some cases. Saw a billboard driving in this morning advertising a 1500 sq ft, 3 brm, 1 & 1/2 bath (with unfinished basement) in a good suburban school district for $119,000. My guess is if you offered them $99K they would take it and run. RUN! How can people with existing homes compete with that sh*t?

I currently rent a 6 year old, 2500 sq ft, 4 bd, 2 & 1/2 bath for $1100 a month that the owner could not sell at $230,000 a year ago and he started at $255K. Three houses on my street (of about 20 homes) have gone into foreclosure in the past year. Three others were up for sale this past summer and even with a price drop, none of them moved. Several more sit empty, so it's getting kinda quiet here.

Anonymous said...

I glanced at the classifieds and a landlord was giving away 42" plasma screen tvs to sign a lease


42" TVs cost under $1000. Last apartment I rented was in 2002. Rent was $1100 a month and I got 1.5 free months rent or a $1650 value.

The 42" TV is a gimmick, but giving away freebies to sign an apartment lease is nothing new.

NEPA crash sitter said...

On the outskirts of the Poconos, about 25 miles NE of Scranton. Listings daily outnumber closed sales 10-1...and the foreclosures have just begun to creep in...saw my first two weeks ago, and since then, there are more every day going up that are bank owned.

Back in 2001, you could purchase a 1500+ sq foot victorian style home in town for 20K. Last spring, that same home was selling for 140-160K. Today, listed at 110-125K. We sold near peak after buyint for 50K, and when I can get a place in town again for less than renting (PITI) I'll consider buying back in...we're out in the stix now renting and while the renting part is fun I'm not digging all the driving. Counter productive to being fiscally responsible.

And to think of all the morons who were screaming 'if we don't buy now we'll never get in!'.

Hiliarious. I see things going right back to 2004 prices (50-80K), because that's what we can AFFORD here based on local income levels.

DaveO said...

1) Frederick County, MD

2) Roughly between 15 and 20 percent drop so far, looking at the numerous houses that I've tracked using MD's property assessment website, that were bought by idiots at the peak and on the market now or sold recently.

3) Total of about 40% or so peak to trough (that's nominal - probably 50%-55% in real terms), when looking at typical incomes for Frederick county (even for people that commute to DC suburbs or the long commute to DC itself) and typical house prices. Plain, mediocre 3 br / 2 ba ranchers that were selling for $450K in Sept. 2005 will realistically cost about $270K at the bottom if the median income increases by then (more like $225K if incomes don't increase). This drop is not daydreaming; this is looking at median household incomes (assuming 2 wage earners) and what you can afford each month with a standard 30-year mortgage and downpayment (which will be the norm again soon if it isn't already). The drop may be even greater if I'm being too optimistic about incomes and assuming the job market will be as strong in the futre as it is now. I've lived in this county for almost 30 years and have never seen such displacement of house prices from what people can realistically afford as I have in the last few years.

4) Mid-2010 at absolute earliest; more like 2011 or 2012.

TimingItRight said...

Am in South Orange County, CA - having had my Aliso Viejo townhome on the market for close to a year. Starting price in Jan. '07 was 529K - just closed escrow in Dec. at 425K. I nosedived the price when I found out the immediate next door unit was on its way to becoming an REO. However, I was real fortunate - I bought in '90 at 186K - never took out any equity, never indebted myself, and the place was almost paid off. I re-financed the interest rate years ago & joined the equity accelerator program, so the mortgage was close to being paid in full. Now, I'm leasing in Newport Coast for a year, waiting for nearby estate properties to nosedive. I'll have close to 50% in a cash downpayment. The community I left - Aliso Viejo - has one of the highest foreclosure rates in the County - + decay and blight setting in so many neighborhoods from lack of standards, community leadership & the community generally being an 'entry level' market. The 100% financing schemes of yesterday brought in an element now bringing down overall community standards. Homes are NOT selling - homeowners have indebted themselves foolishly - 2 & 3 families are moving into condos & SFRs; garages are being used for living areas & scores of vehicles are parked everwhere - looks like.. -- (fill in the blanks). Now that the community is approaching 20 years, its not aging well, nor is it being maintained. Water pipes are breaking in certain sub-dvisions (I was part of a small group of Homeowner Ass'ns trying to improve standards, but the trailer trash crowd wasn't interested in having standards raised - only in screaming during community meetings). Crime is increasing, as is general decay & malaise. People will now be reaping what they've sown & the clowns at City Council are clueless morons who have no sense of leadership whatsoever, let alone plans for dealing with this encroaching blight.

Anonymous said...

Living in a trendy neighborhood of Louisville, Ky (yeah, but I have a job), a.k.a. fly-over country...I have a nice Victorian in a good neighborhood and have probably lost 5% over my purchase price this year after watching similar houses in the neighborhood going for 20-25% more for the last few years, at least I am not those folks! I still expect to loose another $15-25,000 (or 10%+ off the peak) this year alone. It is very hard to judge, some smaller new construction in the same area still sells for about the same price, and they are building and selling condos in the neighborhood, but I am waiting for the crash as peoples spending in the local art galleries, coffee shops, and so forth drops and these places close making this a much less inviting place to live. I fear another 10%+ drop next year, and a an eventual wipe-out of my "equity".

Anonymous said...

Sacramento, CA

As a licensed Loan Officer, I took a lot of flack over the last 4 years for not buying and renting really nice houses for super cheap. but now that the median housing prices have fallen 24% since the peak in the summer or '05, I think we have another 15-20% to go. But these just represent the median prices, some of the ritzier places outside sacramento (folsom, granite bay, el dorado hills, etc.) are screwed. I know several contemporaries who have lost 20+% on their 600K+ homes and are mailing their keys back to the lender.

Anonymous said...

I do not care if they were giving trips to massage parlors, what I am trying to say is that about 1 year ago this rental market here was extremely tight. There is now a deluge of available rentals and rents are being pressured downward.
The amount of available commercial lease signs, business liquidations, homes for sale, repo auctions, closed restaurants, are unbelievable. There is a definite fear in the Inland Empire.


pennywise said...

I live at ground zero, Bakersfield CA. The average sel... er.. make that not-selling-rotting-on-the-market-for-9-months price has dipped by about 10-15% from peak.

The local public is past the denial stage, but they're not calling the shots anymore. The bank assigned trustees, who basically own all of the inventory, have been reluctant to take mark to market offers thus far. Maybe they're still in denial? Perhaps they're covering some investment manager's @ss by delaying the write off?

This is really getting to be a long cycle. Possibly a good future topic Keith?

Anonymous said...

I live in Chicago (downtown, not the burbs) and I don't think prices have dropped at all. Supply is up, the market is slow but no falling prices yet.

This is one of the few liveable urban environments in the United States, the type of place where your own parking place is the equivalent of the holy grail. They can't create more land and jobs are plentiful. I imagine prices might come off some but they have not yet.

I am wondering what is happening with real estate in Manhatten?

Jugador said...

Outskirts of Nashville, Prices have fallen, but not by much. Only a couple of % points. But, really, I don't think that they were ever super wild to begin with.

It costs about 1000 to rent a 3 br house with a nice yard out here, cost pretty much the exact same to own.

Prices in my neighborhood range from 100-200k.