350K in 2008, 250K in 2010 - PA townhouse pricing slide possible? (York: mortgage, loans)

[Gdelemschl]

The Memorial Day cookout found its way to the real-estate-bubble conversations
among friends. One from the Delaware county PA, was exclaiming ..." you wait
and watch... a new townhouse that is presently listed by an optimistic seller at
350K in 2008, will maximally fetch under 250K, come year 2010!!". Upon digging
further, he mentioned a few names like Boothwyn, Media etc. What do you think?
Is it likely that the houses, especially the wall-sharing glorified-huts,
otherwise euphemistically known as "townhouses", will shed some 28.57% in the
next 19 months? Curious minds want to know!

[maf763]

The area hasn't melted down like Florida and other places, but it's not inconceivable that a new townhouse in a development with lots of stock could have that kind of fall. Location still matters, as do other factors.

[Pat_in_Pa]

If you go back to the last real estate downturn, condos and townhouses were hit really hard. What would make this time any easier on that type of real estate?

This time, it's going to depend more on financial dispersion of "bad" loans...meaning how well can 2002-07 crop of purchasers in any particular town weather the changes to their mortgage? How many units were built?

If you read a lot of bubble blogs, you'll get the feeling of doom.
The Housing Wipeout: The Next Leg

If you read mainstream news, you'll get a slightly less feeling of doom.
Housing Woes Hit Affluent Middle-Class Homeowners - General * US * News * Story - MSNBC.com

Some folks say the truth will be somewhere in the middle. In either case, or somewhere in the middle, being a condo/townhome owner is not going to be so wonderful for a few years, especially if you are trying to sell.

[thesixth]

I agree with the others that say it's more a reflection of the style/type of housing being spoken about. Townhouses and condos work for some people throughout their life, but for many who own them initially, once they start having children, they may not be so desireable. It seems many look to move into singles with yards.

[orrmobl]

No way its going down that far...I'd say this area has another 5-10% price depreciation in it, nowhere near 25%. If you look at the comparison of monthly mortgage to rents, things are slightly out of whack still...like 15.5 instead of 14.5....so that means there is still some inbalance in the system.

A recent New York Times article stated that with that kind of ratio, if you need to buy a house this year bc you are relocating, and you are tired of renting, you will take a small hit but could do worse. It further stated that if you were renting currently and had no need to buy, you would be better off waiting until next year to buy, which happens to be what I am doing.

I am so tired of looking at overpriced places that still need new kitchens and baths, that I'm going to wait until next year when the recession has fully hit and more people have defaulted on their loans and people are scrambling to get out of their mortgages, then I'll buy a house that I like, for a reasonable price, not a steal, but without the hassle it seems buying this year will be.