US Housing -30% so far

Another -15% this year. It would be good if it stopped there. We will probably overshoot, a part of me hope the damage is already done. Namely if we don't see a doubling of foreclosures on this doubling of price drop.

In related news, Obama has pledged another $700B bailout even before getting into office. That is TARP2. I fear we may need TARP5 before we get a hold of this running bull.

Comments

pcleddy said…
Nothing on Citigroup bailout?
November 25, 2008 at 11:47:00 AM PST
Anonymous said…
Varies by locale and even within a metro area quite widely. For example -

Atlanta suburbs (OTP) are down anywhere from 15% - 30%. Some (including me) figure it will go to -25%- -40% before it bottoms out. In town (your old neighborhood / mine / near old Jboss) is about down 0%-10% (relative scarcity and the ability not to build in these close in areas, coupled with the fact they are "close-in" help a lot). Figure -10%- -20% worst case here.

Above $500K is suffering due to high Jumbo rates (1.5%-2% higher than FNMA)..of course, this squashes prices down and pushes down the lower valued stuff more too. e.g. high Jumbo rates will still drive prices lower in conforming anyway.

The foreclosures will come in waves for 3-5 more years peaking next year or 2010. Prices bottom in 2010-11. This based off my experience 20 years ago in the Austin mania and bust (if anything this will be worse than that and already is in S FL, IE CA, NV, AZ, etc...). Next up for 40%-50% off ... LA, San Fran, San Jose, etc...

I may want to buy some previously $50K-$100K lots for $5K-$10K...

:-)

... may be able to do so OTP Atlanta in 2010. Will we see $70K houses in north Atlanta again?
November 26, 2008 at 10:12:00 AM PST
adt43wt342 said…
I don't think we can stomach a 40% decline in average home prices.
November 26, 2008 at 12:56:00 PM PST
Anonymous said…
We may not get to 40% down nationwide average. But we'll see up to 80% down in some specific locales, especially in parts of S Fla and Inland Empire and Central Valley of CA. We're close already... some FL homes that were $500K are now $150K.

I figure -20%-25% for Atlanta...worse OTP, less ITP by 2010-11.
November 27, 2008 at 3:59:00 PM PST
adt43wt342 said…
I was reading a blog on the difficulty of building housing indexes. The mix is tricky. If shit sells then comparing these prices with the prices of expensive homes gives a distorted image of the drop as it compares apples to oranges or expensive houses to cheap ones. This assumes the mix varies over time (which I find difficult to see but maybe). Another methodology is to track "same house" prices, but even that was not the panacea. Bottom line is that in thinly traded markets, these numbers are indicative, the truth somewhere in between.
November 28, 2008 at 2:59:00 AM PST
Anonymous said…
The best way to gauge value is to know someone who knows the local market (or follow it yourself) that can track the same or similar houses over time. In some locales you can do this over the internet and anecdotes may be found in blogs.

Case-Shiller is the best index, but not perfect.
November 28, 2008 at 5:03:00 AM PST
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