[LKJ1988]

Just as well face it as it will never come back to the days from 99 till 05. Prices will keep dropping for years to come.

[Ken E]

I have to agree with you there. There's a whole lot of people who will never live long enough to see their houses worth what they've got into them.

[vaughanwilliams]

You would think these fire sale priced homes would be snapped up. Where's all the house flippers when you need them?

[LKJ1988]

Originally Posted by vaughnwilliams

You would think these fire sale priced homes would be snapped up. Where's all the house flippers when you need them?

No point in flipping homes that coming down in price more and more.

[housingcrashsurvivor]

lolol flippers.

Seems they've lost their funding.

I think some of this stuff is pretty rock bottom and that mostly what will be coming down will be the asking prices, maybe not so much the sold-for prices as I can't imagine anyone buying today paying much of a premium.

The figures often quoted that we are only 30-40% down is nonsense. I think the stuff actually selling is now 50-60% or more off peak prices. I realize Japan dropped as much as 80% in some areas but I don't know how much lower metro Tampa can go if you buy for less than a new build would cost plus you're getting the land and infrastructure for free.

Oh, yeah, you can actually live in your house entirely for free now if you scam the system just right. Probably history will not remember this moment as this country's proudest.

[bentlebee]

Originally Posted by CHASLS2

Prices will keep dropping for years to come.

I think that is BS!

So according to you we can wait for zero...

Many communities have reached the bottom and the prices are study...others will fall a little bit more and in some cases prices have gone up...it all depends on location and the condition of the home.

We also have seen it with rentals, some areas are hard to rent out while others rent out so fast that ink is not even dry on the add and they are rented out...

But some people live to be pessimistic....

BTW don't feel bad when you hear that new millionaires have started in 2009 or 2010...

Some people manage to make money in any economy while others are just complaining and whining and only see the glass half full!

[Spring Hillian]

If anyone thinks the "boom years" prices are going to come back, maybe then you will have to wait 23 years. It's about time a $150k home sold for $150k and not $250k like during the boom. People who paid $60, 70, 80k for the house in the 1980's sold with ease for $150k or more a few years ago.

[housingcrashsurvivor]

$80k in 1985 dollars inflates, according to Consumer Price Index, to about $150k in 2006 dollars.

Three houses in my neighborhood sold in the last few months. On average, the buyers paid 25% more than I did per sq ft of house and 75% more than I did per sq ft of land for property I purchased last year. So while I don't know what a double dip recession (if we are headed for that) might do to prices, for here for now they seem to have bottomed. Could they go lower on a second bounce down? To possibly get an indication of that, I looked at the sales history of those recently sold homes. One did not have a sales history recorded as the original family owned for forty years. Of the other two, it turns out that one just sold right at its 1988 price (inflation adjusted) and the other sold 5% less than its 1977 selling price, also inflation adjusted.

If real estate appreciates a point or two greater than inflation, and many argue that it does not, then, respectively, 22 & 33 years of accumulated appreciation has already been deflated away in these recent sales. And if housing appreciates only alongside inflation, than the recent sales seem to show stability, again, that any excess has already been deflated away. Add to all that in increase in population and demand of this area over all that time, and probably the limited supply of housing should have become more valuable. Yet, as shown, our prices are right where they were 30 years ago. Will they go down even more? Who knows. Guess that explains why I left 25% off the table. Better safe than broke.

[vaughanwilliams]

Excuse my naivete, but are you saying homes bought 20+ years ago haven't gotten any more valuable, just followed the inflation curve?

[housingcrashsurvivor]

Correct or so it seems. Though there are periods of ups and downs so that it doesn't just matter when you sell but also when you bought. Still, over time and averaged out throughout the country, I don't have the precise figures at hand but I think even the Case-Shiller studies show housing to increase only about 1% or less above inflation. Other studies I've read say housing increases 2-3% over inflation, but I do not know their accuracy. And here just in the two houses I picked at random as they are the most recent sales near me, I found one 5% down, inflation adjusted, from where it last sold in the 1970s. The results surprised me when I put it to the government's CPI calculator.

Aside from who knows, without seeing each house, what improvements were made over time or how much deferred maintenance came with the latest sale, there are also basic mitigating factors at play. For instance, the last house I sold, post-bubble, realized about 7% annual appreciation during my tenure, luckily during a period of contained inflation, because I bought at the bottom of the last downturn and because I bought in an area which hugely improved during my ownership there. I was involved in the redevelopment of our little area which went from cracktown to national recognition. I'd have realized double digit appreciation had I sold before the bubble popped. But that is the exception, not the rule.

Supply & demand factors also come into play such as population growth or the percentage of an area which has already experienced build-out, in which cases appreciation could beat out inflation. But even the rarity of an item might not hold onto appreciation as things revert back to the mean.

Take waterfront for instance. Now take Cape Coral, ground zero. Here, again completely at random while searching just now Cape Coral Waterfront under $175k is this 2/2 asking $150k http://www.realtor.com/realestateandhomes-detail-alt/5215-Stratford-Court_Cape-Coral_FL_33904_M54434-49834 . It last sold in 1998 for $125k which would be $167,314 in 2010 dollars according to CPI. So it is asking (not sold for, just asking) 10.5% less than what it got a dozen years ago.

edit: I just noticed the last sale on that house $480k in 2006, now asking 70% less, not unlike some areas of Japan.