COS House price plummet in 2007

[dpitts]

I looked at my house which is in Peyton,CO. It did have th shark fin. My house was on the market during most if not all of the shark fin duration. I purchased the house at the end of the shark fin. When the house was first listed it was listed close to the price at top of fin. The house sat on the market till the owner lowered it closer to the bottom of the fin then I bought it. I think the expected selling price for Peyton at least, was not realistic during the fin. I remember seeing house at house saying "Price Reduced, Price reduced", some two or three reductions.

[Bob from down south]

I use the El Paso County tax assessor's database as my data source, and I don't see a "shark fin" like that in actual sales prices.

Zillow seems to work if a market is in a steady trend, but when there are significant discontinuities, like right now, it's all over the map. It's entertaining, but not, IMHO, a credible source of valuation data.

[DannoCO]

The housing here in Colorado Springs did not go up as much as other areas during the boom, and hence has not gone down much in the bust. I believe there have only been two months in the last twelve that showed the median/average prices declining. There is a much larger inventory than two years ago, however. Building permits were up in January. Anecdotally, realtor friends of mine are busier than they have been in quite some time.

[Bob from down south]

Although COS didn't go up as fast and as far as some of the worst places, there's still a solid long-term connection between wages and housing prices that will...must, in fact, drive where prices will stabilize. Houses have to be affordable without a stuntman loan.

That point is approximately 2.8 times annual income. If you plot a distribution of the asking prices of houses on the market in COS and then compare that with the distribution of incomes, there's still a major disconnect between prices and incomes.

The increased activity realtors are starting to see now is just the prelude to the seasonal increase that always comes in the Spring. But Jan 08 sales were more than 20% down from Jan 07, so year over year, there's still a strong downward trend. Most sales in COS occur in Mar-Apr, so we'll know much better in May how things are really going. I believe that many sellers are still holding on to the dreamy prices of yesteryear and will finally see the new reality after the Spring selling season comes and goes with their houses still left on the market. Most of the (few) houses I see moving in the N and NE are in the $275-375K range...very little movement above $375K, because tightening lending rules now require adherence to debt-to-income ratios that make a documented six-figure income a necessity for a $400K+ mortgage.

As Warren Buffet said last week, there's still money for mortgages out there, but no more "dumb money." MGIC, the largest provider of private mortgage insurance, now requires a 680 FICO for any loan above 95% loan-to-value (620 for all others), and more lenders are requiring down payments (i.e. won't even consider loans > 95% LTV) as a result of the "just walk away" movement gaining momentum all across the Looted Plains.

In this case, the race will go to the tortoise. Good things are coming to those who wait...

[jlgerhar]

Originally Posted by Bob from down south

...there's still a solid long-term connection between wages and housing prices that will...must, in fact, drive where prices will stabilize. Houses have to be affordable without a stuntman loan...

Well spoken, Bob. I have been saying that for the past couple of years here in the DC area; everyone used to just dismiss me, saying that the housing was being driven up by demand and that the market would support the prices. Well, maybe for people who bought before the bubble, but what about someone who wants to get a job in DC right out of school? Ever take a look at the starting salaries for government work and compare that to housing costs? I think you are right, the prices will come down over the next year, or so. Unfortunately, many people have used this bubble-based house of cards as a foundation for a lifestyle that they now can't afford; the downward adjustment is not going to be pretty.

[Bideshi]

Originally Posted by jlgerhar

; the downward adjustment is not going to be pretty.

We may be having "Hooverville" all over again. Get a cheap guitar and learn to play the blues.