What is Digg?97 Comments
- hugolp, on 07/19/2008, -4/+58Good, house's at decent prices finally.
- siszam, on 07/19/2008, -2/+31I'm waiting for the bottom so I can houses for my sons. It's good news for some of us. I hate the others have to suffer though.
- BornSlacker, on 07/19/2008, -4/+29As someone who's currently unable to get on the property ladder because the prices are so ridiculously high - this is good news. Although as a renter, this sucks as it probably means the rental market is about to go crazy stupid with demand, thus pushing the prices up.
To summarise, screwed either way! :) - bixby1, on 07/19/2008, -4/+27This is distressing news. I hate getting bad news from smart people.
- pak314, on 07/20/2008, -1/+18Why is housing prices falling considered bad? Do you complain when oil prices or food prices fall? Perhaps if people stop thinking of houses as investments we wouldn't have all these problems.
- yourbrokenoven, on 07/19/2008, -1/+15Good. I'll be glad to see housing prices and apartment rent go back down to what they were Pre-Katrina. They're ridiculously expensive and have been getting more and more expensive over the last three years.
- ousthouse, on 07/20/2008, -2/+16Cheaper houses. What's the problem? The problem is with the dummies who think buying a house they can't afford is a good retirement strategy.
- chuckDontSurf, on 07/20/2008, -0/+13Just curious--what made you think that?
- inactive, on 07/19/2008, -0/+10Local, county and State budgets will see themselves go without money. Federal government doesn't run on property tax.
- zspeed78, on 07/20/2008, -0/+10This kind of speculating, ".. could go down.." reminds me of my favorite stock question and answer:
Person 1: Do you think ABCD will go up or down this week?
Person 2: Yes. - ralphodog, on 07/20/2008, -0/+9Rents are basically a function of housing prices and the interest rate (if you want to be technical it's actually the reverse). Housing prices going down should actually bring rents down with them.
- Carbonlord, on 07/19/2008, -4/+12This is not the news I was hoping to hear, I thought we were at the bottom, now!
- badtiki, on 07/20/2008, -0/+7I agree! Hopefully prices where I live will actually start to come down by then - The houseing market in CT is still out of control, the local news had a report last month about how all the young people can't afford to live in CT so alot of them are bailing the state.
- jerbaker, on 07/20/2008, -0/+7Ya, because a real estate agent is chomping at the bit to tell you that if you buy now, you're going to lose equity for the next two years.
- tastynuggets, on 07/19/2008, -0/+7Think like a contrarian - if you can afford it, might want to start looking around to buy over the next year or so.
- jimmiss, on 07/20/2008, -0/+6You know you're really in trouble when stuff is so bad it actually starts to get complicated.
- rajputwarrior, on 07/20/2008, -0/+6i wish housing would get cheaper in canada, its just stupid how much houses are here... especially in the west coast
- hwy9nightkid, on 07/20/2008, -0/+625 yr old, looks for 2-3 women roommates to share a bed and corners of a small room. rent is free, but you need to be between the ages of 22-24, have black hair, and smell nice.
- b0rna, on 07/20/2008, -0/+6Dude, have you been to Vancouver lately? Sad about house prices dropping? Move to Vancouver! Problem solved. Home to some of the most expensive crappy houses in the whole world. And some really expensive nice ones too.
Problem solved =) - drawkward84, on 07/20/2008, -1/+7Let's make the best of a bad situation. Who needs a roommate?
- Ninh, on 07/19/2008, -2/+7If he had the first clue about the real estate market, his company wouldn't be in this kind of *****, no?
- RegalGSX, on 07/20/2008, -0/+5I own a house but I agree home prices are inflated in many areas of the US. There are a lot of people losing homes over bad loans that they can't afford to pay, but this problem will eventually fix itself. The banks that fail will be bought by other banks, people will snatch up deals on cheap homes, inventory levels will drop, and prices will go back up. It's simple supply and demand at all levels of the economic strata.
For those of us with a lot of equity in our homes it doesn't matter if the price drops 10%, 20%, 30% or perhaps more. Property values are falling nationwide, so if you have to move and sell your house, likely you will be buying a house that has followed the same trend. Actually, you're better off renting until you can find a good deal or until prices begin to level off in a couple years.
Also, sometimes when no one is looking I eat my own boogers. - Seldon2639, on 07/20/2008, -2/+7Guys, we're putting the wrong face on this. Remember, in any market, there have to be winners and losers. When housing prices are high, sellers win and buyers lose. When prices are low, sellers lose and buyers win. No matter what happens in the market (short of full-scale collapse) someone will benefit and someone will be screwed.
Besides, house prices are only of a concern when you're buying or selling. Excluding that, the basic Maslow-based value of a home is all that it's really worth. Aside from that, it's pure vanity. - zacharytelschow, on 07/20/2008, -0/+5Less of my money in politician's hands AND lower housing prices? This article just keeps bringing more good news :)
- inactive, on 07/20/2008, -1/+61. They sure as hell won't be going up any time soon.
2. People will always buy as much house as the bank will let them. Right now the banks are tight as hell, even ratcheting down existing lines of credit.
3. Momentum is going down as fast as it went up.
4. We are returning to an era where median house prices will be tied, albeit it use loosely, to median income (traditionally this ratio is 2.7-3.5:1 was up to 8-1 at its peak).
5. For various reasons, I turned down an offer on my house 18 months ago and took it off the market. I just accepted one for $110K less and am going to rent for a while.
6. I got off light, that represents about a 15% drop. Most So Cal Zips are at least 30% in that timeframe.
7. I predict, and I am betting strongly on it, that prices will go back to 2001 levels, based on math. Further back if emotional inertia is involved.
8. It only takes a $15K drop/year for renting to make money for me (that's the value of the tax write-off).
9. Realtors are the very last people you should listen to about price directions.
10. With Fannie Mae and Freddy Mac's debacles, banks BKing left and right, and not a dime going into private placement REITs, if my buyer bails, I'm effed. I am pretty sure he's the last one out for a while. - carpespasm, on 07/20/2008, -0/+5Right, because listening to the advice of real estate brokers/agents has worked out really swell in the past 10 years. They wouldn't have any reason to try and sugar coat their story.
- chaos7, on 07/20/2008, -1/+5i believe it
- savantidiot, on 07/20/2008, -1/+5Housing prices go down = more are able to afford a home = smaller market looking to rent = why would rent go up? much less "crazy stupid with demand"?
Why people are digging you is beyond me. - pault107, on 07/20/2008, -0/+4It's time to wake up then.
- PaulOwen, on 07/20/2008, -0/+4In the US people can walk away from their loans, in the UK that's not possible - the lender can legally chase you for the upside-down difference between the value of your house and the value of the loan.
The UK government has been far too lenient on mortgage lenders in the UK, with the consequence that housing has been treated as a one-way bet for the banks, making them more reckless.
I resent the UK bailout of mortgage lenders with taxpayers' money for this reason. Far more preferable is to make a few of the banks go bust, and then watch the other banks get really really competetive on their rates, lower their senior staff's pay and get really lean, really really quickly!
;-D - carlosos, on 07/20/2008, -0/+4What suffering? If people sell their house now than they can get the same size of house they were able to get two years ago when they were more expensive. In 2 years they can sell the house and still get the same size of house for that money. It is just trading one thing of the same value for something else of the same value. It is not like only one house loses value while all other ones get more expensive.
It will be nice when home prices are normal so that the people that can't afford them at the moment will be able to buy them. - madk, on 07/20/2008, -1/+5Good...I'm in the buying market and most housing costs are still over-inflated.
- grumpyrain, on 07/20/2008, -0/+4If you want to be really technical, rents are a function of supply and demand of rental properties, and 1 degree separated from housing prices and interest rates.
If there is an under-supply of rental properties, rent will increase. If there is an over-supply of rental properties, rent will drop. There are two factors that determine this. Both high house prices and high interest rates reduce home affordability, and therefore increase the number of people who are looking for a rental property (+ supply). Housing bubbles are largely driven by capital gains. In other words, if you look at the rental returns as a percentage of property cost, they are terrible. Back a few years where we live, these were as low as 2% or 3%. This is because the properties were horrendously overpriced and so many people were putting their money into investment properties.
Then the market stopped growing, interest rates started rising and property prices started to fall. It became a bad idea to invest in new developments with a grim outlook, and so the supply slumped. Now rental properties are in short supply.
This is neither a good thing nor a bad thing. It is simply the function of markets. What was a bad thing is that lenders were throwing lots of money at people who with hindsight had no means to repay in a tougher economy. I appreciate that some people will be burnt by this. They have lost a significant amount of money and some may never recover. Other people made an absolute mint, buying at the right time and selling at the right time.
My only advice is this. Bubbles will *always* burst. Do not buy on the assumption that prices will never drop or that the economy will be the same as today. - ralphodog, on 07/20/2008, -0/+4To be fair, one should note that Citi did a somewhat better job than most of their competitors in predicting the problems we're now seeing and is doing better than most of them.
- StillAnonymous, on 07/20/2008, -0/+3The problem is that there are too many experts with agendas.
- InfiniteNothing, on 07/20/2008, -1/+4Mostly because people who are upside down on their loans will walk away causing general economic distress.
- inactive, on 07/20/2008, -0/+3If GM and Toyota start mass producing cars like the Volt, see speculators to be scared and the price of oil to drop.
- thumperings, on 07/20/2008, -0/+3This is great news for me; I plan to be broke for exactly 2 more years.
- Huzsar, on 07/20/2008, -0/+3Tell me about it, I'm looking for a condo near Hartford right now, so I have a closer ride to work and they are all expensive and if they go down in price its negligible. The good thing is that I see more and more of them on the market so I think the price will start to catch up slowly to the lower demand and higher supply.
- scamper22, on 07/20/2008, -0/+3ah, finally someone with common sense. Cheap housing is a wonderful for the middle class. You know how much the government's hate us.
The only people to benefit from increasing house prices are investors and the bankers (mortgages)... I would welcome a world where the average person is not spending 30% of their income just on housing. - grumpyrain, on 07/20/2008, -2/+5Don't count on it. Unless China and India decide to drop back to their demand from 5 years ago, supply and demand will ensure you don't see that price. The high price is exaggerated by speculators, but I will be highly surprised if it drops below $100.
- cam0man, on 07/20/2008, -0/+3Nobody can get loans to buy houses now...the only people buying them already have tons of capital. I know of lots of people who are stuck renting now even though they could afford mortgage payments, just that they can't get a loan. These are houses, not pizzas....low prices doesn't mean someone can just open their wallet and cash in on the savings.
So the rental market is now flooded by two new demographics...those who would have been able to get a loan from a bank, and also the people who lost their homes to forclosures.
Sucks....because of the spike I'm demand my rents jumping $300 a month come october. - cdigioia, on 07/20/2008, -0/+3oh and NO FAT CHICKS
- spaceman84, on 07/20/2008, -1/+3This should be obvious. Housing prices are still 50% above historic value in the US. It's not as bad as it was (nearly 100% over historic value), but we've got a lot way to go just to get back to normal.
- thumperings, on 07/20/2008, -0/+2just rent a house boat.
- InorganicMatter, on 07/20/2008, -0/+2Oh good, that's right about when I'll be buying!
- zacharytelschow, on 07/20/2008, -0/+2They won't... gosh, that was a convincing argument. The "there will be a further fall camp" has a historic run up in prices along with a lot of future foreclosures and no more loose credit to back their point. What have you got?
- arplayer2k, on 07/20/2008, -0/+2What qualifications does the average RE Agent have to be an expert in giving any advice, let alone regrading RE. Reading your local home sales magazine doesn't count. In California, the requirements to become an agent aren't that high, neither are their qualifications. A good RE Agent is hard to come by and they will cost you.
- NonServium, on 07/21/2008, -0/+2"The reason houses cost so much is because"...
...is because that's what they can sell them for. Why would they sell them for a penny less than they think they can find someone to pay to purchase them in a reasonable time period? - Iztikeit, on 07/20/2008, -0/+2You'll get yours soon enough.....We all will.
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