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When will home prices rise again?
09-18-2009, 06:05 PM
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#1
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Thinks s/he gets paid by the post
Join Date: Mar 2007
Posts: 3,323
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When will home prices rise again?
In case some of you don't use MarketWatch daily and might miss this, I felt many would possibly like to see when the homes in your State will rebound.
Don't open this link unless you are prepared for some not so pleasant news :
Home prices won't regain peak this decade: Moody's - MarketWatch
That map is pretty discouraging.....
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09-18-2009, 07:29 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2005
Posts: 10,252
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In my area, we never had bubble prices, but a slow and steady 1-2% per year increase just below the rate of inflation. This year home prices in my area are up even though there is no inflation. Some homes for sale within 2 blocks are asking 30% more than recent sales. The sellers are dreaming or waiting for a rube from California to pay full asking price. Don't laugh. It has happened in this area.
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09-18-2009, 07:32 PM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,008
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Well, I don't know if we need home prices to reach their peak value any time soon - certainly that isn't required for an economic recovery. Home prices are starting to recover in many areas. At the same time, the inventory of available houses has dropped considerably. This is all really pretty encouraging news for the future.
Audrey
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09-18-2009, 08:27 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Aug 2007
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Quote:
Originally Posted by audreyh1
Well, I don't know if we need home prices to reach their peak value any time soon - certainly that isn't required for an economic recovery. Home prices are starting to recover in many areas. At the same time, the inventory of available houses has dropped considerably. This is all really pretty encouraging news for the future.
Audrey
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Except this all needs to work its way through the market:
DD
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09-18-2009, 10:04 PM
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#5
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Recycles dryer sheets
Join Date: Oct 2005
Posts: 325
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I've bought 7 houses in the last year. If I can sell these in 2014 at peak prices, I'll be sitting pretty with a 350%+ gain. I'm in Indiana though, so an orange state, not a red one.
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09-19-2009, 12:59 AM
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#6
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Recycles dryer sheets
Join Date: Jun 2007
Posts: 118
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I'm certainly no expert when it comes to real estate, but it seems to me that home price appreciation may face a stiff headwind when interest rates revert back to the mean. I wonder how many homes would be sold at today's prices if mortgage rates went back up the say 7 percent, and whether the rate increase would have any significant effect on how much sellers could reasonably expect to receive.
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09-19-2009, 01:53 AM
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#7
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Full time employment: Posting here.
Join Date: Nov 2008
Location: Harrogate, UK
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Of course...if you are already a home owner and don't plan on trying to make money off selling....the prices staying down are fine with me....keeps the property taxes lower.
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09-19-2009, 09:18 AM
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#8
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Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,629
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I assume they are talking about nominal prices, not CPI or wage index adjusted. If that's correct, it seems that the big drivers for getting back to peak prices are the nominal growth in wages and whatever happens to interest rates.
In the long run, house prices have to be controlled by rational buyers' decisions about what percent of their gross incomes they are willing to commit to mortgage payments, and by rational lenders' decisions about how much they are willing to lend, and at what rate. During the bubble, there were a lot of "irrational" decisons by both lenders and borrowers. I hope we don't go back there. So all we can do is wait for wages to go up enough to justify those prices, recognizing that rising wages are likely to be partially offset by rising interest rates.
I don't know how anyone can calculate either future wages or interest rates with any degree of accuracy, but I can believe "a long time".
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09-19-2009, 09:27 AM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,008
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IMO talking about getting back to "peak" prices is just noise and has no relevance to the economic recovery. It doesn't really matter how long that takes.
What does matter is a) when does it stop getting worse (and it has stopped) and b) when does it start improving - and signs are also that it has. So that will help the rest of the economy going forward, not hurt it.
Audrey
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09-19-2009, 09:37 AM
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#10
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Full time employment: Posting here.
Join Date: Jun 2009
Location: SoCal
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I agree with Audrey, I think housing needs to stabilize but not necessarily return to where it was.
But the chart the Db put up is frightening at the same time. I'm still shocked that the quantity of "prime" mortgages is so small compared to Alt-A, sub-prime. Scary. Its probably a good thing that we don't return to the "peak" anytime soon, if that was how we got there in the first place.
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09-19-2009, 09:51 AM
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#11
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Location: Denver
Posts: 3,506
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The housing market is very local, so while this data may be useful from a macro point of view, it probably does not describe what's going to happen to your property value.
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09-19-2009, 10:07 AM
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#12
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,474
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Quote:
Originally Posted by audreyh1
Well, I don't know if we need home prices to reach their peak value any time soon - certainly that isn't required for an economic recovery. Home prices are starting to recover in many areas. At the same time, the inventory of available houses has dropped considerably. This is all really pretty encouraging news for the future.
Audrey
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It looks like selling prices for homes in my neighborhood may be starting to recover. (Below is my own amateurish graph of medians derived from these selling prices, which are available in the newspaper here each week). The local realtors association says that the number of sales is rebounding, too. I hope we can sell our homes in 2010!
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09-19-2009, 10:47 AM
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#14
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Thinks s/he gets paid by the post
Join Date: Mar 2007
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I, too, am living in an area just like LOL! is where home values have gone up 1-2% steadily--although from my neighbors who just put their house up for sale, the prices have dropped 6% in the month of August. Seems like this picture can turn on a dime, so that steady escalation can drop fast.
And, yes, I have seen a rube from California pay waaaay over-price for a house here 4 years ago. Fixed it totally up and is now trying to get another $50K out of it (that's after being on the market for awhile and dropping it about $30K already). Locals were shocked someone would overpay that much to begin with, so they'll have a loooooong wait to pull the money they are looking for out of the locals here. Probably ain't gonna happen either. Gotta love those Californians, tho!
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Please consider adopting a rescue animal. So very many need a furr-ever home and someone to love them! And if we all spay/neuter our pets there won't be an overpopulation to put to death.
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09-19-2009, 11:06 AM
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#15
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
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I can't imagine buying a house that is four times my salary, much less five times my salary. I bought my present house in 2002, at 2.65 times my salary. Even though mortgage interest rates have plummeted during the past 30 years and still seem to be going down, still I wonder who can buy these expensive homes.
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Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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09-19-2009, 11:10 AM
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#16
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Thinks s/he gets paid by the post
Join Date: Jul 2009
Location: Austin
Posts: 1,142
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Quote:
Originally Posted by Want2retire
still I wonder who can buy these expensive homes.
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Short answer: Nobody
Long answer: Anybody who can/could get "creative financing": ARMs, negative amortization loans, NINJA loans, imaginative appraisals.....
Just sign here. Don't worry. Everybody does it.
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09-19-2009, 01:35 PM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2005
Location: Chicago
Posts: 13,151
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If housing prices rise because the economy has improved in general (much lower unemployment, rising productivity and wages, stocks up on good business prospects, etc.), that's good news. If housing prices rise regardless of a continuing poor or sluggish economy, that's bad news.
I hope housing prices rise as a reflection of an improving economy and citizens having the $$$ to bid home prices up a bit. But I hope home prices do not rise because of speculation, govt incentives and that sort of thing.
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09-19-2009, 04:50 PM
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#18
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,698
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I hope the home values in Fla drop to nothing as I get a kick watching the local governments raise the Millage Rates as the home prices drop. House drops 100K and taxes go up, what a joke.
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09-19-2009, 04:55 PM
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#19
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Join Date: Mar 2009
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A house down the street from me(in western PA) sold about a month ago for the full asking price. It is a nice place in a desirable area in a medium sized city not hard hit by the recession. I am hopeful that if I decide to retire and sell in a couple of years that I can break even(maybe). I think I am going to go ahead with plans to put in California closet systems, maybe trick out the garage with Gladiator storage, too. Make the place more sellable. I need to quit watching so much HGTV!
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09-19-2009, 06:31 PM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
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Quote:
Originally Posted by youbet
If housing prices rise because the economy has improved in general (much lower unemployment, rising productivity and wages, stocks up on good business prospects, etc.), that's good news. If housing prices rise regardless of a continuing poor or sluggish economy, that's bad news.
I hope housing prices rise as a reflection of an improving economy and citizens having the $$$ to bid home prices up a bit. But I hope home prices do not rise because of speculation, govt incentives and that sort of thing.
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Another reason for home prices to rise is because supply has been drastically cut. New houses built drastically down.
Audrey
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