Question Details

Jared, Home Buyer in

Who still believes in in a house price "Recovery?"

Asked by Jared, Sun Sep 28, 2008

It seems that a key premise in the logic people are using to respond to the questions on this board is the notion that home prices will recover. Do people still believe that home prices will recover? When? To what level? I would like to know where people think prices will stabilize in 3 parts.
When will houses stabilize?
At what level? examples may be XX% of current price, XX% of peak price, or to levels in 19XX-20XX.
Will people be able to pay off mortgages at that rate? Will people be able to pay off the whole mortgage?

I'll start.
I don't think prices will be stable untill they come to levels where people are able to own free and clear so I imagine 1999-2001 prices next year.

Please don't negate this thread with stories about how the left side of XXX block is stable or going up. We should all be able to agree by now that the market is down and if you believe that stories of sunshine in a few neighborhoods will change that there are other threads discussing them.

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Answers

2
Historically, housing tracked inflation - its appreciation only slightly better than inflation.
I think that in most markets, we will see prices stablize near 2000 + inflation. It might even be lower in markets with hugh supplies.
I don't think we will start to see stablization until the first-time buyers come back to the market. Without easy credit, the first-time buyer can only get a mortgage the old fashion way, based on income and savings.
0 votes Thank Flag Link Thu Oct 2, 2008
This is a really good topic to discuss Jared, because I get asked this question daily and I hear other agents answering with a tall tale about how certain areas are "immune" from the declining values....garbage.
We have so many homesellers that are dropping their prices 10k per month to try to get buyers to even look at homes. The two problems my area is experiencing are deals falling through due to unlendable buyers and homes not appraising for sale price due to short sales and BPO's.
Until the short sales and BPO's are less prevalent, home prices will continue to fall. It will become a cash only market eventually, unless someone can muster up a huge downpayment, have exceptional credit AND get a decent interest rate.
For the buyers that have the qualifications, the market is gold. Not many people will tell you the reality of the market, and it is not all gloom and doom, just tough right now.
0 votes Thank Flag Link Thu Oct 2, 2008
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