With the release of the Case-Shiller November numbers today, I've updated the graph of a Bay Area house whose hypothetical value was $600,000 at the peak of the bubble.
In one year it fell in value by $165,435:
(Nov 07 - $537,134, Nov 08 - $371,699)
In just one month it fell $11,430:
(Oct 08 - $383,130, Nov 08 - $371,699)
And according to the Chicago Mercantile Exchange futures contracts it will fall to $313,230 by November 2009.
As the numbers show we're not anywhere close to a bottom yet.
[Note: All future prices on the graph represent contracts that traded today. To see last month's graph click here.]
Update: Case-Shiller futures data should be lagged 2 months (i.e. November 2009 should be September 2009).
I have one better for you..in SFL.. followed a home where the current homeowners paid $800K for the house in 07. House value today in 09..$400K! NICE...
ReplyDeleteWhy would anyone buy a house now knowing that it will go down 2%/month? Quite ridiculous. But thanks to Nancy "I am an Avowed Communist" Pelosi prices were held too high, too long (and we can thak Barney "I Hate Everyone" Frank too.
ReplyDeleteWhy would anybody buy a house when rent is 1/2 as expensive as a mortgage, and is falling?
ReplyDeleteThe only reason I can think, is that they are idiots.
Sure, this is Pelosi and Frank's fault! What a fool! The bankers own these people just like they own the Republicans. Open your eyes and put your brain in gear, or continue to be robbed over and over, its your choice.
ReplyDeleteI've noticed that many ppl in the USA freely throw around the words "Communist" and "Socialist" while having no clue what they mean. These same people have never even been outside of the country. They are therefore ignorant buffoons.
ReplyDeleteThis world would be A much better place if we would just stop supporting these's criminals.www.zeitgeistmovie.com
ReplyDeleteAgreed! Most of these people loosely throwing around words that they couldn't even define if asked really should stop the name calling. Look at your own personal lives to see how you also benefited from the housing euphoria over the last few years, and therefore are also to blame! Somehow, they choose to overlook how 8 years of misguided incompetence in the Whitehouse also greatly added to this debacle.
ReplyDeleteIt will drop more but if interest rates drop .5% further & when home prices drop 10% more I'm a buyer.. Lock in 30 years at historical lows and watch inflation take care of any future losses.
ReplyDeleteLots of money on the sidelines. Hard to time the bottoms...
Nice graph. Can you do this for the other metro areas?
ReplyDeleteBut if you buy a house when interest rates are lowest, what will happen when those rates rise? Rising rates make buying a house more expensive. And in the new era of tighter credit and higher down payment requirements, the capital cost of a house will likely go lower when rates start to rise again due to inflation (which will have to come if the gov't prints trillions of dollars... inflation may actually hurt you.
ReplyDeleteCost to rent in sub prime areas is now more expensive than buying. Many houses available in the Bay Area under 100k. Some qualify FHA minimum down. Total pmnt inc taxes, ins on 100k purchase w/ 3% down is 750/mo. Rent on the same house would be about 1200/mo. Maybe rents will come down, maybe prices will come down more. Who knows but there sure is a window now to get in cheap. And things can change overnight if the banks make a real hard push to restructure loans which they are trying to do right now.
ReplyDeleteNobody is going to ring a bell when the housing market hits bottom!!
ReplyDeleteI suspect there will be a protracted bottom due to many contributing factors; we're going to need new money from real growth and not just over-leveraging. And this is the sort of trendline that should alarm the local foreclosure flipping hipsters--if they would step outside the local group-think.
ReplyDeleteI almost buy a house at couples of times from 2006 (peak!) to last year 2008. Until now, I calm down! I am glad I haven't bought a house. Be Patient! Think the oil price at $148 now it is even less than $48 in few months! Things will change....
ReplyDeleteContinuous House price slump has left a lot of families in a lurch due to falling equity tied up in their homes. to escape such Get valuable information to substantially increase the value of your house or property during this credit crunch and house market crash by getting the highest price for your property when selling. Check out http://www.boostmyhouseprice.com/
ReplyDeleteI'm in the Bay Area and it's tempting to buy, even with prices falling. As someone said, in SOME areas rent is now more than buying a house (assuming you put a decent down payment down). If you're in it for the long haul now should be an ok time to buy. To the same point, why not wait until later in the year when the stimulus tax credit is still valid yet home prices have dropped even further...
ReplyDelete