The real estate bubble is over

[cute fuzzy bunny]

It is around here, anyhow.

As of about 4-5 months ago, our house was probably worth about $425 from a purchase price of $250k three years ago. Supported by recent sales of similar properties around the neighborhood. Smaller, older homes in an adjacent area were hitting $330-350 from common sales of around $200k three years ago. Newer 2000 sq foot homes on tiny lots were selling for the high three hundreds.

As of this month, a neighbor tried to get $380 for his home, which is similar to mine, and got very few bites except for some offers in the 350 range. A couple of those older smaller homes just got reduced into the 300 area. And the new homes are "on sale! Two Days Only! (for the last three weeks)" in the low to mid 300's.

My neighbors pulled his house off the market. I think its a bad move, he already built a 'dream home' on a big piece of property he bought cheaply. Figured to sell his current place for the high 300's and move on. I think the price is going to keep going down to the low 300's, maybe high 200's.

We're really out there on the outskirts and the home values we got to were WAY out of line. For a few bucks more you could live in much nicer Sacramento area neighborhoods. For a few bucks more than that, you could get into some SF bay area neighborhoods.

Now the question is...will this effect continue to the "better" areas around here, and then to the areas "better" than those?

If nothing else, the "speculation" prices are off the table. I've actually seen a few properties in the paper that made me go "Hmmm..." instead of "yeah right!".