"...home prices to continue falling another 20 percent..."
Some say we are in a recession now....LOL.
At least 20% and more like 60%.
Prices shot up 200-300% so they need to correct to come in line with wages......that means a looooong way to go down and for a long time.
Look at it this way. it only costs $60-to-$100 per square foot to build a house. Anything higher then that is mere inflation, speculation, pork for the builders.
There are few 2,000 SF houses worth more then $200,000. If you pay $400,000 or more for one it makes no economic sense. These are the reasons why houses will be sold two-for-one soon as builders go under, more job losses, massive tax hikes, cut in SS benefits, cut in 401K plans, etc.
Of course the 'percentages' will vary GREATLY...as ALL RE is 'LOCAL'...
10 year MINIMUM on price declines...
Actual 'percent' is anyones guess...
But look for DOWN pressure thru 2015....and that's a LONG TIME.
-50% or more would be better. The homes in my area are still obscenely priced. I have a decent job and there is no way I'm going to pay a quarter of a million dollars for some piece of crap house built 40 years ago that is really worth maybe $75K. I think home priced NEED to drop AT LEAST another 50%. Seriously.
Danno, Agreed with you, home prices still ridiculously high; even if $250K aint alot in your home town, who cares! Banks created this mess and they continue to keep us in it. My primary indication for a bottom is when JPM falls sub $5 and is bailed out. Then I will believe this is all over. Until then even the "healthy" banks are lying like a degenerate gambler with no money standing in front of a casino looking for his next big win!
LOL, "quarter million dollars." You don't know how lucky you are. 1 story, 1300 square foot, 1960s vintage stucco boxes are still selling for $600k in my area. I'd love to get a house for 250.
its worth what people will pay for it. Do you really think the gov is going to let housing prices fall another 20% - rather than simply inflate the economy? In a couple years you won't be able to find a shack for 250k. Not that 250k will be worth anything.
Nouriel Roubini said real estate is down $3 trillion or 23%. He said it will go down to a total of $6-8 trillion. If I understand what he is saying, the $6-8 trillion would take real estate down a total of 46% to 61%. With the resulting collapse in real estate prices, $2 trillion loss in credit card loans and major downturn in the stock market, it adds up to a real mess.
hi bill, i haven't been here for awhile, but have recently started back dabbling in slv and dgp. the unfolding banking crisis has been spectacular, and i cannot understand price action on gold as serious as the situation has become. i had bid on and won a couple of local houses at an auction in october, but the seller, a bank, rejected my bids as too low. while i am glad now the bids were rejected, you have to wonder about the mentality of these banks and where we are going to end up. i also have heard there is at least another 30% to fall in realestate. we are only about halfway back thru the bubble prices, where houses will represent a reasonable value again. if we hit the mother of all depressions, they could fall another 50% on top of that. lets hope we all make it thru this mess without starting a world war.
I agree completely with you. Builders and sellers and banks are being unrealistic. Inventory is now at the 4.2 year level and no end in sight and yet they refuse to lower the price back to reality in some areas........hard to understand. That is why I am against any bailout for the home builders and related industry. Their lack of reality and refusal to lower prices is why Schiller predicts a further 40% drop in prices since at some point they will simply sit empty as in Palmdale Cali where hundreds of homes sit vacant....looks like a ghost town.