Home Prices Could Drop For The Next Three Years: Report

[laughingliberal]

Thinking about buying a home? You might want to proceed cautiously. The housing market may continue to decline, potentially for at least three more years, Bloomberg reports today.

There is some evidence that a double-dip in housing may be looming. According to data released by CoreLogic today home prices remained flat in July compared to the same period last year, the first time in five months without a year-over-year increase. Compared to June of this year, prices in July declined 0.6 percent.

But the housing market's biggest concern is an excess of housing inventory, which continues to grow as mortgage-holders default and more homes hit the anemic market Bloomberg estimates that 12 million homes will flood the market over the next three years, as lenders put the "shadow inventory," or homes with delinquent loans, up for sale.

Citing analysis from Moody's, Fannie Mae, Barclays and Morgan Stanley, Bloomberg reports the housing market has already tanked 28 percent since 2006. It's been a fairly dismal summer for housing, as July saw a 25.5 percent drop in existing sales from the same period in 2009, according to the National Association of Realtors. It was the lowest number of existing home sales since 1995. <snip>

http://www.huffingtonpost.com/2010/09/15/home-prices-could-drop_n_717660.html

[Warpy]

1. Buying a house is not a great deal right now

unless rents in the area are rising rapidly and the monthly whack on buying a house is a hedge against rents that seem to have no ceiling in sight.

[David__77]

2. I'm waiting for a couple years at least.

We're not seeing a zoom upward here in California for some time. And what's happening is that the "better areas" are still coming down as more well off people capitulate to the market realities, though more slowly that those who already have done so.

[dkf]

3. Part of me is happy that homes will be more affordable and the other part of me is scared we can't

Handle this.

[Historic NY]

4. 3yrs mine is almost back to what it was before 2000....and i

live in the fast growing county in NY. We had a growth rate of 12.6 every year then until 2006.

Mine dropped over 115k since Sept 1,06.

[EFerrari]

8. I lost every bit of equity, about the same amount.

I might as well have thrown my down payment out the window.

[eridani]

5. Prices have to align with what people can afford to pay

What could be more basic than that?

[KillCapitalism]

9. That's the way I see it.

Average home prices are still around $175,000-ish while median income for a household is a tad under $50K. In my opinion to be more "safe" and not get over your head with too large of a mortgage, the home you buy should not cost more than two times your yearly income. In that case, the average home price should be right at around $100,000. You can buy homes for that amount in rural Texas I know, but there are still wide disparities between regions. $100K will get you something decent in Texas, but where I live it will barely buy you a shithole.

[Skittles]

6. GOOD

[Ex Lurker]

10. since my town depends almost entirely on the forest products industry, "Good" is not the adjective

that first comes to mind.

[EFerrari]

12. Do you mean, like building materials, like ply wood?

[Ex Lurker]

13. yes, both raw and finished lumber n/t

[EFerrari]

14. My whole family is in real estate and construction

and no one is doing anything right now. This is about as scary as it's been in my lifetime.

[DemocratSinceBirth]

16. See Post Fifteen

The R E bust already put me out of business.

[EFerrari]

11. Well, not good for those of us who managed to scrape together

a down and who have just seen it blow away. We shouldn't be bearing all the consequences for the risks that Wall Street took and that's what's happening.

[laughingliberal]

18. That was us. We had finally managed to save a down & felt, at out age, it was a good idea to buy.

Seemed 15 years before retirement, it made sense. Locked in a mortgage so we wouldn't face fluctuating rents, should have been able to build equity over 15 years. Our plan was we could sell at a little profit and use it to buy something in an area where real estate was lower. Oh, well, now we're scraping to eat and the house is worth about 1/2 what we financed.

[Skittles]

25. houses have too expensive for too long

when they get to what they are really worth, I'd freaking buy one

[flamingdem]

7. I'm not looking forward to the bragging of homeowners "It went 50000 last year!"

I coulda told them what goes up comes down but... they weren't hearing it.

[DemocratSinceBirth]

15. That's Discouraging Because Nine Of The Last Nine Economic Recoveries Were Led By Real Estate

~

[madokie]

17. In some ways I was part of this problem

meaning that I was in the concrete business during the housing boom of the 90's and early 00's. We were doing the footings and floors, driveways, sidewalks etc. for many of these huge houses that were being built around here and making good money while doing it. At least I didn't squander all my ill gotten goods. Well thats a little harsh as I worked hard in getting what I got but nevertheless I was aware of the fact that this housing boom can't hold out for ever and knew it was coming to an end at some point. Likely many of the huge houses that we did the concrete on will ultimately be selling for pennies on the dollar as not too many can afford to heat and cool 4000 sq ft. I suspect some will be broken down to be multifamily as most all of them had at least a three car garage, some even a two car garage separate from the main house for the rich bastids to put their high priced toys in. A few even with mother 'n laws quarters too. Hopefully this new position that the President is nominating Elizabeth Warren too will help in my predictions not coming to pass.

[lonestarnot]

20. Don't you dare blame yourself!

:hug:

[madokie]

23. I was needing a hug about right now, thanks

sometimes a man just needs a hug :hug::hi:

[lonestarnot]

24. Glad to be of service!

;) :hi:

[lonestarnot]

19. "must steal rest of crumbs."

[laughingliberal]

22. +1000 nt

[Dappleganger]

21. Here in NE FL...

where more than half the homes are underwater, I can definitely see this happening.

We're going to sit where we are for awhile anyway but for anyone else who needs to move, this is going to make things much tougher.