Monday, June 02, 2008

I doubt we'll keep seeing home prices decline like now.

I've rounded down the current rates of declines and projected future Case-Shiller values. Its scary. We have markets going 25% below my inflation prediction as early as May of 2009. At the current rate, the last of the markets I'm tracking will drop 25% below the inflation (projected as 4% inflation) before the end of 2010!















We've never had a real estate correction proceed at this rate. Ok, Florida 1925/1926 was faster, but that was regional. This is national. This is serious and scary.

By the way, projections we're near the bottom just amuse me. We're about to exit the best season of the year for selling a home. The rest of 2008 should be a better buyer's market. It will not be that obvious in June. Like I've said before, expect the big change in the Fall. Once the kids are back in school, sellers will be faced with very interesting choices.

I think everything that can be done to get suckers deserving families into homes will be done. But everything is pointing to greater down payment requirements. Are you saving for that rainy day?

I'm not sure when the bottom will be. It won't be before 2010 is certain. Its also certain that the recovery this time is going to be slow. Mostly due to lenders having to re-learn old lessons.

Got Popcorn?
Neil

2 comments:

sandman said...

Hey, projections that we're near the bottom are very accurate, Neil. I can say it loudly and proudly, we're near the bottom!*

"Its also certain that the recovery this time is going to be slow. Mostly due to lenders having to re-learn old lessons."

Heck, I can name 5-10 other reasons why the recovery will be ultra slow. Anybody professing a "V" bottom should not be taken seriously - and this is becoming more and more clear as things progress. These people have either no financial sense, or a vested interest in getting people to buy.


* when compared to 2005 ;)

wannabuy said...


Heck, I can name 5-10 other reasons why the recovery will be ultra slow.


So could I. But I want people to return and read my blog. ;)

These people have either no financial sense, or a vested interest in getting people to buy.

Its a mix. Mostly in the MSM, the later. At the office, its balanced... (too many *need* to sell at a high price to retire).

Got Popcorn?
Neil