Homes More Affordable Now Than Ever? (foreclosure, income tax, mortgage, mortgage)

[esmith143]

Originally Posted by HappyTexan

And if you do the math..that falls into to 5-6X salary to home..still to high of a debt ratio.

High by historical standards ... however, history was written when interest rates weren't in the 4's.

Median family income in the U.S. is $60,374.

[le roi]

Originally Posted by esmith143

High by historical standards ... however, history was written when interest rates weren't in the 4's.

Median family income in the U.S. is $60,374.

History was also written when we didn't have negative household savings rates.

[hammy5]

Originally Posted by HappyTexan

If median income is $50K then NAR is telling people they can affort 5-6X their salaries on a home ?
Nope..that is just asking for trouble. Get back to the 2.5-3X range and THEN homes become affordable.

There are MANY homes in my area that would work for the median income. The problem? The people who make the median income, dont' want them. they want homes that are $100,000 MORE than what they actually afford and they want home owners to drop their prices to THEIR levels so they can have the granite and stainless steel. They won't settle for a starter home. They want more. That is part of the huge problem that I see.

Kristine

[Tek_Freek]

We'll wait. When house prices are realistic we will buy. Until then I see no reason to even consider it.

[middle-aged mom]

Originally Posted by boocake

Does that make anyone take pause at the fact that the general consensus seems to be that homes are still 20 to 30% (in general) overpriced?

The NAR rosy picture balances unrealistic perceptions, like this.

[fairmarketvalue]

The only ones polled in this "consensus" are the ones who are wishing to buy and hoping the nice home they really seek, comes down to this unrealistic "20-30%". It won't happen, especially since homes already started dropping in late 2006, through '07, and 1/2 of '08. You can't honestly think that after some areas have already fallen 30%, they go another 20-30? That would really mean 50-60%. Boy, do I feel like a broken record!!! Again, I read posts like this and wonder where you've been. The bubble didn't just burst last month, people!!! We've been addressing this for well over a year now. And just think of states like CA,FL,AZ,NV. You think any seller expects after already losing 40 and even 50%, they are going to go another 20-30%? Do the math!

[fairmarketvalue]

Originally Posted by hammy5

There are MANY homes in my area that would work for the median income. The problem? The people who make the median income, dont' want them. they want homes that are $100,000 MORE than what they actually afford and they want home owners to drop their prices to THEIR levels so they can have the granite and stainless steel. They won't settle for a starter home. They want more. That is part of the huge problem that I see.

Kristine

Exactly!

[tilli]

And just think of states like CA,FL,AZ,NV. You think any seller expects after already losing 40 and even 50%, they are going to go another 20-30%? Do the math!

In my area, the median price more than doubled in the space of what... 6 years iirc? If prices wind up at 40 to 50% off peak prices that would put us right about where we would historically expect to be if the bubble had not happened. It's not about what sellers expect or want, it's about what the market will bear. Without the insanely loose lending standards that fueled the bubble, prices must return to parity with income levels which were stagnant at best over the same period that saw astronomical appreciation in housing. Considering rising unemployment and wage cuts it's not unrealistic to expect prices to overshoot even beyond 50% off peak on the way down. When all those option ARMs start to reset it will exert even more downward pressure, and all the sub-prime foreclosures haven't worked their way out of the system yet.

[Humboldt1]

Are prices still dropping in Wheaton and suburban dupage county? The numbers I have seen show they are and that we have not hit bottom price-wise.

FMV,

You seem to state that Wheaton hit bottom price-wise in mid to late 2008. I disagree, respectfully. You and your wife are smart people, but we see this differently.

MiddleagedMom,

You are relator out in Barrington area. I am sure you know more about real estate in Wheaton and Dupage than either FMV or I (we each own places in Dupage County, Itasca for me and Wheaton for FMV). Thanks.

[ocean2026]

Prices are still dropping almost everywhere - so if homes are affordable now they will be more affordable later in the year. Of course more jobs may be lost - so it cuts both ways.