Okay with me. Still well above the long term average for price:income here in LA

Lando Lincoln: I forget - were home prices good or bad in 2000?

Good. Boom started 1999

I'm SO glad I bought my home in 2006.

2000 prices would be an improvement for my place in South Phoenix. It's worth less now than when it was brand new in 1999, NOT adjused for inflation. We're talking $20K less. And that's for a 1400 square foot 3BR place.

My realtor told me about this ripple effect coming up this spring. I'm seriously considering buying a rental property.

hurdboy: bhcompy: Lando Lincoln: I forget - were home prices good or bad in 2000?

Good. Boom started 1999

Thereabouts, yeah. I'd say 1997 is probably closer. Sweet spot on home values is somewhere around 2.25*median household income. Even in places where there's been a correction, it's still up around 3*MHI.

There's been a correction here(where it was up to/over 10x).. It's currently around 5-6x. Coastal SoCal has always held above that traditional value(in the 3s), but it's still far too expensive compared to income.

Excellent. Looking to pick up a few rental properties sometime in the next 18 months.

soopey: Sooo... this would be good for people looking to buy a house in the 2nd half of this year?

Probably, as long as you're not concerned with "flipping" the house and selling it in a year or two for a profit.

I have to keep telling myself "It's only a loss if/when I sell. Until then, any price is theoretical".

The Onanist: I'm SO glad I bought my home in 2006.

Me too. What really gets me is I knew it was too much to pay...I knew it....but I did it anyway. Now I'm so underwater it scares me.

Nadie_AZ: hurdboy: bhcompy: Lando Lincoln: I forget - were home prices good or bad in 2000?

Good. Boom started 1999

Thereabouts, yeah. I'd say 1997 is probably closer. Sweet spot on home values is somewhere around 2.25*median household income. Even in places where there's been a correction, it's still up around 3*MHI.

Yup.

I was chatting with a relative (who is a real estate agent) the other night. She and I talked about the last reset of the ARMs that are set to expire this year. She told me the industry was expecting it, but didn't know how many of them would take place. Once these happen, the market can finally finish correcting.

I told her that a lot of younger people were no longer considering home ownership based on the fallout of the market. She didn't argue the point- but she did add that it was very very hard for people in her area (Chicago) to get loans. So even if they were interested, they couldn't qualify.

I live in a high rise downtown. There have been quite a few foreclosures in my building. There is a three bedroom on my floor going for 950,000. A married couple(both doctors) could not get the loan unless they put half down. This unit has sat vacant since the old owner lost it two years ago...

Nadie_AZ: I was chatting with a relative (who is a real estate agent) the other night. She and I talked about the last reset of the ARMs that are set to expire this year. She told me the industry was expecting it, but didn't know how many of them would take place. Once these happen, the market can finally finish correcting.

I told her that a lot of younger people were no longer considering home ownership based on the fallout of the market. She didn't argue the point- but she did add that it was very very hard for people in her area (Chicago) to get loans. So even if they were interested, they couldn't qualify.

the correction in home prices is only one aspect of this problem. Overall household indebtness is also keeping the market from a rebound. This is getting a little bit better over the last couple of years (mostly thanks to deleveraging in the housing market), but we still have a long way to go.



Sadly, it looks like this trend is not holding course. (new window)

Just got my tax assessment last week, and they value it 20k less this year. Don't care, because I'm not going anywhere soon anyhow. I'm at the point that I couldn't rent for what my mortgage is.
I never looked at my house as an "investment" , but a place to hang my hat.

Just signed with the bank this morning. 3.75%, on a house that I'm getting for 50k under assessed.

Go me.

oh good, my house was still bought less than it was worth in 2000.

Step 1: Buy new house at rock bottom prices.
Step 2: Strategic default on ridiculously underwater home mortgage.
Step 3: ???
Step 4: Profit!

I'm likely going to buy a house soon. In my area, home prices are still ridiculously high. It's about twice the national average for comparably priced house, with a normal lot about 10k a year in taxes. Going through multiple listing search sites for the area, even tiny shiatty houses that haven't been upgraded in thirty years approach $350,000.

timujin: Awesome, maybe I'll be able to buy something. L.A. is rough, even now.

Come to the IE, we have lower prices, and all the meth you can buy!

hurdboy: bhcompy: Lando Lincoln: I forget - were home prices good or bad in 2000?

Good. Boom started 1999

Thereabouts, yeah. I'd say 1997 is probably closer. Sweet spot on home values is somewhere around 2.25*median household income. Even in places where there's been a correction, it's still up around 3*MHI.

Slowly working its way back down there. Median in my area is about 45k and there are starting to be some decent houses in the 110-120 range.

Hamster On A Wheel: The Onanist: I'm SO glad I bought my home in 2006.

Me too. What really gets me is I knew it was too much to pay...I knew it....but I did it anyway. Now I'm so underwater it scares me.

It was kind of like playing a game of chicken back then. Your intuition says, "this shiat has to stop sometime, I can wait out", while another part of your is thinking, "but if it doesn't stop, I'm just throwing away money or may be stuck renting for the next decade."

What to do, What To Do?

This effect was amplified in areas like Orange County, CA (where I was at the time). My parents paid $225K for a nice 2 story 4br 2,5ba with a pool back in the mid-80's. By 2000, the comps were going for around 400k - 500k, and they peaked in 2006 around a million. Add to this the stories of 30-something friends cashing out their equity, moving somewhere cheap, paying cash for a bigger, nicer place and covering the rest of their expenses by working part time at Home Depot and you have a recipe for some really bad decisions...

... like when I closed on my modest 1 story house in Phoenix in 2006. I was working for the builder at the time, we were getting fat bonuses, an employee discount and plenty of work. Based on the crowds of 60 or more people at the sales offices, all hoping to be one of the 3 or 4 who would be *allowed* to buy a house, it seemed like the right thing to to. Especially for first time buyers who knew little other than a housing market that was perpetually on the rise, and which required fast, aggressive action to get in on.

Then came the crash...
... then the layoffs
... then the short-sale

A harsh lesson it was, and now I'm sitting on the side-lines with all of the others who are not convinced we are not setting ourselves up for another righteous farking if we dare buy again.

Like the guy in that movie 'Stripes' said, "It's a big, shiat sandwich, and we all get to take a bite."

farknozzle: Excellent. Looking to pick up a few rental properties sometime in the next 18 months.

Obvious shill is obvious.

I'm ahead of the curve. My house hit 2000 levels a few months ago!

What Plants Crave: A harsh lesson it was, and now I'm sitting on the side-lines with all of the others who are not convinced we are not setting ourselves up for another righteous farking if we dare buy again.

I came very close to giving in myself. I first thought "this can't go on forever" when we started looking in 2002, and watched as prices outran the down payment savings I thought I needed.

When the market does finally bottom, it isn't going to bounce right back up, despite what the Realtards will try and tell you to get you to buy now Now NOW!

y'see it would be one thing if these houses were nice tongue and groove solid wood beam construction. But I'll betcha most homes (that I've seen built) are 2x4's and chipboard walls with just enough insulation to comply with code. They are shiat shacks built to the lowest standards legally allowed with ZERO craftsmanship and ofc they want to charge you double because "it is a home dude". And people fell for this when times were good.

fair enough.

Now prices are coming down due to lack of demand and a glut of supply. The only people this really hurts are those who are trying to unload their junky shiat...its like offloading a bat shiat crazy ex to a friend in your circle. If you live in an upscale neighborhood and are selling...it may take a while but in general you just need to market it right and make sure that the staging of the house is done professionally. For those of you trying to sell your cape or 1K sq/ft crap box...feel free to reduce your prices even further.

I'm hoping for a nice crash in 3-4 years when I'm ready to buy.

Longtime Lurker: I'm hoping for a nice crash in 3-4 years when I'm ready to buy.

Same here I am patiently hoard my money to put a large amount down when the time feels right. I think many first-time buyers around here feel the same way that is why the rental market is so hot. They've shifted from talking about the hot condo market to the hot condo rental market lately, I think it is a sign.

Still the way the foreign investors are dumping cash into the market here (Toronto) I think it will take an interest rate hike or two to put all of their rentals deep enough underwater to scare them away. Of course they are mostly into condos and I will be looking at something with a foundation in the ground at least, be it townhouse semi or fully detached.

My condolences to all of you who are underwater. Just about all of my young neighbors are underwater and I silently wish that their marriages are going well and they don't have to go anywhere just now.

Well good, it will nice to be able to buy a house at decent prices.


Still I prefer to rent...nice to have someone else do it all for me.
I've got other things to spend my time on.

House prices are going to stay low - and likely go lower - for a number of years, as the wave of baby boomers selling their house increases. They'll have to see due to either needing some of the equity to pay for retirement, or losing their jobs due to age and not being able to afford their house. We are just seeing the leading edge of the boomer generation. The peak years fro births were the late 1950's and early 1960's, Those folks are in their early and mid 50's, and when that wave starts hitting the age of 60 then you'll really see prices fall.

So don't buy a house expecting to gain any equity in it for the next 15-20 years.

quickdraw: I have thought about buying a foreclosed property but I worry about the messy chain of title issues.

In my experience it's not so bad. My new house is basically a microcosm of the housing crash - good solid house built in the late 60s but in need of some work, bought for $400k in 2006, wasn't kept up, foreclosed on in 2011, sold to me for less than half of its 2006 price in 2012.

The bank initially wanted the option of giving us a quitclaim deed but we refused, and they gave us a standard one.

The discovery that there's hardwood floors in pretty good condition under most of the disgusting carpets was a very nice one.

Anyone wanna buy some rental properties in northern lower Michigan? (in the resort areas)

timujin: Awesome, maybe I'll be able to buy something. L.A. is rough, even now.

Yeah falling home prices are great news. Depressions are great for the economy too. The problem is nobody is smart like you are so they don't understand these things

YixilTesiphon: quickdraw: I have thought about buying a foreclosed property but I worry about the messy chain of title issues.

In my experience it's not so bad. My new house is basically a microcosm of the housing crash - good solid house built in the late 60s but in need of some work, bought for $400k in 2006, wasn't kept up, foreclosed on in 2011, sold to me for less than half of its 2006 price in 2012.

The bank initially wanted the option of giving us a quitclaim deed but we refused, and they gave us a standard one.

The discovery that there's hardwood floors in pretty good condition under most of the disgusting carpets was a very nice one.

Built in the 60s huh ?

Your drywall or veener plaster has asbestos in it.

Bob16: YixilTesiphon: quickdraw: I have thought about buying a foreclosed property but I worry about the messy chain of title issues.

In my experience it's not so bad. My new house is basically a microcosm of the housing crash - good solid house built in the late 60s but in need of some work, bought for $400k in 2006, wasn't kept up, foreclosed on in 2011, sold to me for less than half of its 2006 price in 2012.

The bank initially wanted the option of giving us a quitclaim deed but we refused, and they gave us a standard one.

The discovery that there's hardwood floors in pretty good condition under most of the disgusting carpets was a very nice one.

Built in the 60s huh ?

Your drywall or veener plaster has asbestos in it.

So don't mess with the drywall without a suitable contractor for cleanup?

/bfd, most houses in established areas have lead and/or asbestos in them because they ARE that old

HeadLever: Sadly, it looks like this trend is not holding course. (new window)

So in 2009, a few years after a housing and higher education boom and crash in a market where nobody can get out of their purchase, the average household is about $120,000 in debt.

I'm not sure how upset I am about that. It sucks and I'm sure we'll see similar swells from time to time but I think 1995-2005 in the long term is not going to be a good representative of expected growth.

bhcompy: Bob16: YixilTesiphon: quickdraw: I have thought about buying a foreclosed property but I worry about the messy chain of title issues.

In my experience it's not so bad. My new house is basically a microcosm of the housing crash - good solid house built in the late 60s but in need of some work, bought for $400k in 2006, wasn't kept up, foreclosed on in 2011, sold to me for less than half of its 2006 price in 2012.

The bank initially wanted the option of giving us a quitclaim deed but we refused, and they gave us a standard one.

The discovery that there's hardwood floors in pretty good condition under most of the disgusting carpets was a very nice one.

Built in the 60s huh ?

Your drywall or veener plaster has asbestos in it.

So don't mess with the drywall without a suitable contractor for cleanup?

/bfd, most houses in established areas have lead and/or asbestos in them because they ARE that old

It was pretty extensively redone in the 80s, it seems (if the gold blinds [YEAH] are any indication). So I'm not worried about the ugly plaster on top of paneling and wallpaper that's throughout the house, but I will keep it in mind for the drywall.

County says it was built in 1971.

YixilTesiphon: bhcompy: Bob16: YixilTesiphon: quickdraw: I have thought about buying a foreclosed property but I worry about the messy chain of title issues.

In my experience it's not so bad. My new house is basically a microcosm of the housing crash - good solid house built in the late 60s but in need of some work, bought for $400k in 2006, wasn't kept up, foreclosed on in 2011, sold to me for less than half of its 2006 price in 2012.

The bank initially wanted the option of giving us a quitclaim deed but we refused, and they gave us a standard one.

The discovery that there's hardwood floors in pretty good condition under most of the disgusting carpets was a very nice one.

Built in the 60s huh ?

Your drywall or veener plaster has asbestos in it.

So don't mess with the drywall without a suitable contractor for cleanup?

/bfd, most houses in established areas have lead and/or asbestos in them because they ARE that old

It was pretty extensively redone in the 80s, it seems (if the gold blinds [YEAH] are any indication). So I'm not worried about the ugly plaster on top of paneling and wallpaper that's throughout the house, but I will keep it in mind for the drywall.

County says it was built in 1971.

Original tile/linolium, popcorn ceiling, etc is stuff to be aware of as well