Diana Olick covers the housing beat for CNBC. Once upon a time she seemed to do a good job, but she is gradually appearing more and more clueless:Prices are now at levels not seen since 2003, essentially giving back all the gains of the housing boom.The housing boom did not begin in 2003. Instead, it began about five years earlier, around 1997-1998. By 2001, we were in mild bubble territory. The housing market still has a lot to fall before it gets back to historically normal valuations.
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Right, it needs to fall to 1997 levels. Robert Shiller, however, predicts an overshoot will occur given the bubble size - so look for 1995 prices.
ReplyDeleteI think the term "bubblehead" is dead.
There is no chance we are going to end up seeing 1995 levels, nor 1997-1998 levels.
ReplyDeleteWe may see 2000-2001 levels area wide, but that is about a best case scenario.
We've had 30% inflation in aggregate over the past decade. We won't be seeing 1998 nominal housing prices again.
ReplyDelete2000 levels would be phenomenal. I wouldnt mind buying a newer townhome in rockville for about $250K. Right now
ReplyDeleteIm seeing new stuff start to pop up in the fallsgrove and kingfarm areas of rockville, but they are still asking for $600-$800K. Its like they havent noticed single 4 bedroom homes half a mile away going for $190K. I think I will go shopping for a townhome there next year once they notice its not 2006 anymore.
you are not accounting for deflation, guys. 1997 nominal prices are coming. Remember, this is not your mothers recession, or your grandfathers depression. This one is for the record books, with new rules.
ReplyDeleteCash will be king like never before when we are near bottom. Unfortunatley, the inflationary bounce therafter will be a cash destroyer. Predicting the bottom is very important this time (for those who have money to capitalize on it)
Anonymous, I suspect you are lance trolling again...
ReplyDeleteThere is absolutely no way we are going to approach 1997 prices unless maybe you are talking about parts of PWC.
1997 nominal prices are coming.
ReplyDeleteYOWSA!!! I certainly hope not. PWC seems to be stabilizing at 2001nominal pricing. It may drop down to 2000 nominal pricing when it bottoms - but 1997?
I especially find that implausible for other areas especialy inside the beltway. Take DC for example. 4 years into the bust its now down 5.2% (in nominal pricing) from the peak.
If it goes to 1997 pricing, it will suddenly need to drop an additional 63% - a remarkable achievement considering it dropped 5.2% in 4 years.
Im not saying its impossible, but I just dont know how you can plausibly get there from here.
"Im not saying its impossible, but I just dont know how you can plausibly get there from here."
ReplyDelete10 years of stagnant economy like Japan would be the only way.
The answer will depend on whether you are talking about the entire country or just DC. Inside the Beltway, I expect there will be at least slight inflation and slight income appreciation due to the federal government becoming busier than ever at bailing everyone out. Historically, DC inflation rates have exceeded most areas of the country, and I expect that trend to continue.
ReplyDeleteAnonymous said...
ReplyDelete4 years into the bust its now down 5.2% (in nominal pricing) from the peak.
4 years into the bust??
Sales started dropping in 2005, inventory started building in 2005.
ReplyDeleteIts now 2009 - 4 years.
"Sales started dropping in 2005, inventory started building in 2005."
ReplyDeleteYeah where is that? Certainly not in MD or DC. You talking about manassas??
"Sales started dropping in 2005, inventory started building in 2005."
ReplyDeleteYeah where is that? Certainly not in MD or DC. You talking about manassas??
All she has to do is check NYC Property Tax Valuations for 2009/2010 they are dropping like a rock!!! NYC is being realistic values are DOWN!!!
ReplyDeleteDiana Olick helped save our house with a segment she ran a year ago. She is in our estimation a caring and excellent force in the media, and actually made a difference in our case in Florida. Her dates and facts work in our area. It is you negative nerds that suck.
ReplyDelete