We’ll probably see a few glimpses of recovery in certain areas, especially low-end, but highish-end houses that bubbled up will drop like stone over the next few years.

Sorry to adbutler, I was a tad harsh.

TeamBush ran record deficits during good times and obviously most of the states didn’t manage their financial affairs much better either. I was going to suggest we go back to states issuing their own currency but the CA IOUs are the virtual equivalent.

The CA budget is filled with gimmicks and they’re chasing a moving target (collapsing tax revenues). A CA bankruptcy is going to go right down to the wire – but even if the Governator was a Nazi (he is , sort of) O’B would never let them fail, CA is 15% of the national economy and the cost of all government borrowing would absolutely EXPLODE and Dow 6600 would be a fond memory.

If our biggest state with 40M people and 15% of GDP failed that would tip the US gevernment into a Moodys/S&P downgrade n’est pas?

Don’t know that it’s dissembling. I could envision various scenarios where you could have rises in prices in certain sectors that would give you stats like that without the market being really any healthier. One of the Jim the Realtor clips mentions getting bidding wars when some 4-500k house has the price dropped enough by the bank, say to 300k. The house will sell at a big loss compared to the mortgage but could still drive up the median and the mean.

Agree about Houston. Just need to drive around West U, say up the Buffalo Speedway and see the spec houses and McMansions just sitting. Some I’ve seen actually identify the bank as the owner.

However, I believe adbutler is effectively dissembling when he/she looks only at 2nd order effects in the data such as median prices. There are clearly different ‘zones’ within the housing market, that are behaving very differently. Look at the lack of sales in the ‘higher-end’ of Houston, and perhaps wonder if maybe 10 or 20% of those houses were purchased on pay option ARMs soon to reset…

Wave of foreclosures and short sales in the low-end where the sub-prime loans to blue-collar workers were concentrated. Example link: (Look at all the cheaply sold houses, remember these are generally nicely kept houses in suburbs, not exurbs, in decent streets, with a high proportion of Indian / Mexican people).
http://www.zillow.com/homes/map/houston_rb/#/homes/for_sale/map/29.68769,-95.574959,29.680233,-95.587833_rect/15_zm/0_mmm/1_rs/

A locked solid property market on the high end where barely anything is selling. Example: This is inside the 610 loop and practically nothing has sold, despite a huge number of house for sale. This is a train-wreck that hasn’t quite hit yet.
http://www.zillow.com/homes/map/houston_rb/#/homes/for_sale/map/29.711603,-95.430098,29.696693,-95.455847_rect/14_zm/0_mmm/1_rs/

“Prices were up, however, by a rather robust 4.1% for the median (which was $181,800) and 4.2% for the average house sold (which was $227,300).” – Dennis Gartman summarizing existing home sales data for June.

I am in the deflationary camp, but this data doesn’t support some of the claims made in the media.

High-end home lease
In today’s sluggish real estate market, homeowners who can’t sell are leasing their properties until the market turns around — even on the very high end of the housing spectrum.

A 26,214-square-foot Mediterranean manse in Piney Point that’s been on the market for two years is now for rent. The price: $60,000 a month.

The house has eight bedrooms, 10 full baths and a four-car garage. It sits on 40,000 square feet of land.

When it was first listed, the property was priced at $18 million. It has since been reduced to $12.9 million.

Martha Turner Properties has the listing.

Turner said the most expensive rental she remembers was a fully-furnished turn-of-the-century estate on Westmoreland that leased in 1978 to a Saudi princess for $25,000 a month.

The Piney Point property is owned by Douglas and Melanie Johnson, according to the Harris County Appraisal District, which has the property appraised at $5.7 million.

Lennar Signals Fleeting Builder Rally as Buyers Flee
http://www.bloomberg.com/apps/news?pid=20601109&sid=aOAsVYtdZzpg