It all depends on where in the country you are.

Tue Nov 6 2007, 12:06

As of monday, November 5 2007, two Wall Street powerhouses have dismissed their CEOs for allowing the firms (Citi Group & Merril L.) to become over exposed to sub-prime loans. They were mixing high risk and medium risk baskets of home loans, and offering these securities to the markets. As of this date, Merril Lynch is reporting 8 billion in known losses, with more paper they're sitting on yet to be evaluated. Citi Group, this weekend reported at least 11 billion in losses, with similar future uncertainties. These to firms are but the opening rounds in this mess.

Added to this is an annual U.S. trade deficit of (Merchandise trade deficit 2007) approx. 3/4 trillion. In addition, U.S. government debt (authorized debt limit ceiling) is now north of 9 trillion.

Here's the point: We're about to get slammed by extremely high interest rates, both because foreign investment has no interest in dollar denominated investments (reference the collapsing dollar against foreign currencies), and because inflation will have to be addressed by the Fed with in the near future due to "easy money" that's been sloshing around for the last 10 to 20 years. So yes, it is indeed possible we may see a reversion to pre 1980s home prices.

Tue Nov 6 2007, 11:55

Continuation of price analysis: If instead of wild appreciation, then wild depreciation, I had experienced a steady simple 7% annual increase in value after purchase todays number of $520, 000 would be approximately the same. If my house is worth $520,000 again in 2009, My annual rate of appreciation will have been 5% per year. which is pretty close to the long term historic average.

Fri Oct 19 2007, 15:29

Not here In Roseville California. I evaluate my own home on the anniversary of my 2002 purchase. Here are the Valuations.

2002 Purchased New for $348,000 added $20,000 in landscaping and after move in
Valuation $368,000
2003 it was worth $420,000
2004 it was worth $500,000
2005 it was worth $650,000
2006 it was worth $585,000
today it is worth $520,000.

My own home closely tracks the California Median Price. It is an excellent benchmark tool I use for measuring general price trends for Roseville, and the greater Sacramento region.

Fri Oct 19 2007, 15:12

Can somebody say pipe dream? There are lots of deals out there but there has also been a lot of appreciation in the market too. Most areas are still appreciating. Look for the best deal, they are out there and drop crazy offers.

Fri Oct 19 2007, 14:41

Hello,

No prices have for sure not dropped to this level. In many areas though we have seen prices drop to about the 2004 level which is off about 10-15% from our peak for single family homes and about 12-20% for condos. These statistics also are for the price point up to about $3 million. From $3 million and above the price levels have maintained their values and even increased.

Hope this helps. Please let me know if you have further questions. I just joined so I am a little late in answering. Kevin Schmidtchen - 805-689-6877

Fri Oct 19 2007, 13:20

Greg,

August 2007 prices have not retreated to 2003 prices here in South Santa Barbara County. My team and I spend quite a few hours tracking the statistics through both the MLS and Title companies. The median sales price of a single family home/PUD was $850k in August of 2003. In August of 2007, the median sales price was $1,250,800. That number is about the same as the August 2005 figure, and actually 4% higher than August 2006 median prices.

While most areas in the US and California are experiences a decline in real estate prices, the market in South Santa Barbara county is very healthy with great sales activity. Prices are actually appreciating in the Upper-end markets, and experiencing some minor fluctuations in the lower end markets. Most specialists in this area are expecting a level market the next 18 months, with perhaps a 1-5% shift in prices either way.

I hope this helps. Be sure to visit out website for more information on the local economy, pricing trends, etc.

Wed Sep 26 2007, 13:21

The answer is simple: No. Are you looking to see a drop to 2003? In Southern California houses appreciated at approximately 9-10% per year.... fantastic, yes? No.

From what I know about 1 year ago in Orange County - Homes have lost 9-11% of their value - depending on location. Considering the simple math - it would take quite a bit more for 2007 to revert to the 2003 levels.

If all reports are correct - the end is near... The market will correct itself as soon as the banks get their act together... Will you be ready? Anyone waiting in the wings - could miss the boat & lose a good deal on a home today waiting for tomorrow.

Thu Sep 6 2007, 13:16

Not where I am, no. August 2007 prices are not at their 2003 level.

Thu Sep 6 2007, 12:26

Jeanette or JR,

Can you answer the original question re:2003 prices? Thank you

Thu Sep 6 2007, 08:13

Okay - what is a TECHTONIC CORRECTION - and who EXACTLY is predicting falling to the 1973 levels? This is probably the most absurd thing I've heard to date AND irresponsible to say the least.

Do you have any idea what you are suggesting? A drop such as you stated; would be so catastrophic that the depression would look like a day at the spa. Please MR or MS Adslkg - provide some valid reference to your statement or retract completely

Tue Aug 21 2007, 13:00

No. But, the way things are going we might get there yet. If problems continue in the lending industry the market could get softer yet. Some are calling for a "techtonic correction", which would adjust real estate back to 1973 levels.

Tue Aug 21 2007, 11:57