Wednesday, August 25, 2010

Housing May Drop Another 25%?

With all the talk of the awful sales numbers for both existing and new homes in July, there was one small kernel of seeming good news: existing home prices rose slightly. The national median home price actually increased by 0.7% last month compared to a year earlier, according to the National Association of Realtors. But don't expect this trend to continue -- prices still have a ways to fall before they settle at their natural level.
Several weeks ago, Barry Ritholtz posted the following chart. It was originally featured by the New York Times, and updated by a commenter to Ritholtz's blog named Steve Barry.
Shiller-Ritholtz-Barry Home Price Index.png
This is a pretty fascinating picture. First, it shows just how incredibly absurd the housing boom was. Beginning in the 1940s, inflation-adjusted homes prices have settled around the 110 value according to the Case-Shiller index. Yet, the index value exceeded 200 in 2006. Prices began a descent when housing collapsed, but as of May the index remained well above the natural value of 110.
More Here..


  1. How much further does it have to fall to return to the historic mean?


  2. 5:45
    forget historic mean. i want the housing price to fall lower than historic low so everyone can afford. that way we don't have housing speculation and nobody goes homeless. i see house is like food. we need it. that is how u help the poors and fight homelessness.

  3. 5:45
    Unfortunately, the banks own most of the houses and they don't want to loose their values while the rest of us are in debt and becoming homeless.

  4. Ha! We should be so 'lucky' for a stop at the 110 level...more likely we blow right past it just as violently as the parabolic move up to 200. 60? 50? 40, anyone? Eventually, people will see houses for what they are - money pit piles of bricks. Don't be a slave to a pile of bricks!

  5. Simple rule: You can't take anything with you when you die.

    Reality: You have to live somewhere.

    The ridiculous house flipping and speculation days are over. Thank God!

  6. We need an update to the housing roller coaster. I wanna see this bitch head for the ground!
    Video: Housing Roller Coaster

  7. housing levels prices against income levels .
    How will that work as unemployment levels rise ?
    and when credit is already maxed out anyway.
    Only 25% more fallin value required?
    Try maybe another 75% or so fall in price!
    Fannie and freddy -the government and the fed own most of the housing mortgages the taxpayer will pick up the tab for the banksters.
    but that doesnt create a market.

    To match future third world style future income levels.
    People on food stamps will not have mich spare cash or credit to buy Mac Mansions.
    As we can see in the falling figures on housing sales today.
    The great ponzi The dollar hegenomy and its propery bubble is dead only the debts to pay off for the bankster remain.
    That should take a decade or two.
    hot business tip:
    americans with capital and enterprise should
    go into the booming tent business not the housing construction and finance markets.

  8. Tent cities or the coming war of the squaters?

  9. Being a Beginner, I'm at all times looking for blog posts which will help me ....

    Thank you so much.

    financial news

  10. Eventually; people will see cardboard boxes for what they are.

    Not very good housing.

  11. Audrina,

    Want to pet a troll?

  12. None of you people ever had a real job. I pay fifty cents a day silver for a grown man to pull a plow. If you fall down I will beat you. You can buy potatoes at the going price. Sleep in the ditches on the edges of the fields.

    If you are caught stealing you will be shot.

    You women can stay in the compound with me. They can cook and clean and weave cotton for trade goods. Room and board only.

    Lumberjacks seventy five cents a day.

    Diesel repairmen a dollar.

  13. Somewhere I read that someone thinks the McMansions will be used as boarding houses.
    I think that comment was not too far off the mark.


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