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Assuming the bubble began in 2003 (which is debatable on its own), shouldn't we expect the price return to 115% of year 2002 level?
I would go a little higher than that ... you figure 5 percent standard home appreciation per year and it would be more like 130 percent after six years ...
However ... there's other factors to consider. For example, the town where I'm currently looking to buy a house is a completely different town than it was in 2002.
The boom spawned brand new subdivisions with much nicer houses and with a lot more square footage, amenities, etc. than the old pre-2002 neighborhoods so ... how do you apply 2002 prices and standard home appreciation rates to the areas that didn't exist before and are vastly different?
It really gets complicated trying to figure out what the real market value of some these homes should be.
I would go a little higher than that ... you figure 5 percent standard home appreciation per year and it would be more like 130 percent after six years ...
However ... there's other factors to consider. For example, the town where I'm currently looking to buy a house is a completely different town than it was in 2002.
The boom spawned brand new subdivisions with much nicer houses and with a lot more square footage, amenities, etc. than the old pre-2002 neighborhoods so ... how do you apply 2002 prices and standard home appreciation rates to the areas that didn't exist before and are vastly different?
It really gets complicated trying to figure out what the real market value of some these homes should be.
Great post. I totally agree with you.
I keep seeing ppl saying that the price should return to pre-2003 level. I was trying to show that this is, IN GENERAL, NOT a good idea.
Rule does not apply to choice property. We still have fast sales in Indiana but it has to be special. I bet waterfront property in some areas and beach front would not fall under this. Manhattan apartments are still selling according to NY Times. Indiana never experienced the fast inflation in housing that Nevada, California and Florida did.
However, the standard house with nothing special in a bunch of nothing special houses where there is lots of competition, may fit or even be less. Who knows.
I keep seeing ppl saying that the price should return to pre-2003 level. I was trying to show that this is, IN GENERAL, NOT a good idea.
Well ... I know I'm going to have to pay more than 2002 prices for the area where I want to live so ...
I have no delusions about getting 2002 prices. However, I will try to get the best possible deal and I don't think that's going to happen right now. There's still too much downside with weekly price reductions.
I'd rather pay 5 percent more off the bottom than buy on the downslide with 20 plus percent depreciation to go ... I really don't want to get into an instant negative equity situation.
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