Have lived in the Boston area for a number of years now and that early 2005 home price peak appears about right. When buying a house in the western suburbs in 2003, the homes were already not moving and we had lots of time to look and decide. Just 18 months years earlier than that, my admin at that time, bought a house in a less expensive suburb and had to bid over asking price just to get a house. I saw things changing by then.
tenaciousdsaid:
At November 30, 2011 2:33 pm
That Case-Shiller chart just doesn’t want to give up the ghost! It’s nowhere near a full reversion.
flocktardsaid:
At November 30, 2011 2:49 pm
The only problem I have with Case Schiller is that “all real estate is local,” and using it as a proxy for the entire housing market can be somewhat misleading.
Let’s face it, places like Vegas and huge swaths of Florida are going to be radioactive for years to come, while other markets will attain some equilibrium, and some faster than others. If you take out what came to be known as the “sand states”- Arizona, Florida, Nevada and Florida- the picture will evolve differently over time.
As far as getting pricing back into the 2005-2007 post NetCap rule elimination bubble, forget it. Your grandchildren will be lucky to see it.
Invictus: I actually created a chart that showed the CS-20 broken down with the six mega-bubble areas vs. the “other” fourteen. I’ll have to dig it out and post it.
Expatsaid:
At November 30, 2011 5:35 pm
Median household income multiplied by 2.75. Call me when we are there and we can start talking about a market near the bottom. 49k x 2.75 = $135k. Median house price is around $170k so another 20% to go at least.
It has nothing to do with interest rates, inflation, or Ben Bernanke. It has to do with affordability, unemployment, inventories, and lending. Sure, today anyone who can get a loan can afford a massive house thanks to ZIRP. But when ZIRP is over (talk to Italy and Spain, baby), then house prices will make the final, big leg down.
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Have lived in the Boston area for a number of years now and that early 2005 home price peak appears about right. When buying a house in the western suburbs in 2003, the homes were already not moving and we had lots of time to look and decide. Just 18 months years earlier than that, my admin at that time, bought a house in a less expensive suburb and had to bid over asking price just to get a house. I saw things changing by then.
That Case-Shiller chart just doesn’t want to give up the ghost! It’s nowhere near a full reversion.
The only problem I have with Case Schiller is that “all real estate is local,” and using it as a proxy for the entire housing market can be somewhat misleading.
Let’s face it, places like Vegas and huge swaths of Florida are going to be radioactive for years to come, while other markets will attain some equilibrium, and some faster than others. If you take out what came to be known as the “sand states”- Arizona, Florida, Nevada and Florida- the picture will evolve differently over time.
As far as getting pricing back into the 2005-2007 post NetCap rule elimination bubble, forget it. Your grandchildren will be lucky to see it.
Invictus: I actually created a chart that showed the CS-20 broken down with the six mega-bubble areas vs. the “other” fourteen. I’ll have to dig it out and post it.
Median household income multiplied by 2.75. Call me when we are there and we can start talking about a market near the bottom. 49k x 2.75 = $135k. Median house price is around $170k so another 20% to go at least.
It has nothing to do with interest rates, inflation, or Ben Bernanke. It has to do with affordability, unemployment, inventories, and lending. Sure, today anyone who can get a loan can afford a massive house thanks to ZIRP. But when ZIRP is over (talk to Italy and Spain, baby), then house prices will make the final, big leg down.