From CNBC:
[Meredith Whitney] also said she expected home prices to fall another 30 percent, contrary to some predictions that housing may have bottomed.She discusses housing in the video from the 5:00 mark to 6:15:
"Home prices cannot bottom while liquidity is still contracting from the economy," she said.
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I detect a crush.
ReplyDeleteThanks for the clarification about using multiplication--hilarious!
ReplyDeleteBrandon, you'd be surprised at how many people don't understand that bit.
ReplyDeleteSweet!
ReplyDeleteHopefully the owners of the handful of houses I saw for sale on Capitol Hill yesterday see this. I'm tired of them selling their houses so quickly at prices I can't afford. It's like they're immune to reality!
It MUST STOP!
LOL - same here IBC. In Alexandria, old sitters are once again flying off the shelves - prices -8% off peak.
ReplyDeleteMaybe they gave away an additional -42% concession in closing costs. Ill check and get back to you...
I think there is some wishful thinking going on here. Down 50%?
ReplyDeleteI think maybe another 10% down in this region unless we see a full-blown depression with corresponding unemployment rates.
Anonymous said...
ReplyDeleteI think there is some wishful thinking going on here. Down 50%?
I think maybe another 10% down in this region unless we see a full-blown depression with corresponding unemployment rates.
Prices in NW DC and some parts of Montgomery shot up an insane %300/%400!!! So prices have to correct down to sane levels. %50 is not a lot after all the insane increase!!
Agree - 50% is not insane after the increase but it flies in the face of our local metrics here.
ReplyDelete50% off in Arlington is not insane either - yet it just aint gonna happen.
Its all about supply & demand. Inventory isnt growing and homes are still selling as briskly as they were in 08, 07 & 06.
3 years into this prices are down 8-10%. I thought for sure it would implode by now but it didnt. I dont know why it didnt, & probably never will. Still - ive accepted it and moved on.
Anonymous said...
ReplyDeleteAgree - 50% is not insane after the increase but it flies in the face of our local metrics here.
50% off in Arlington is not insane either - yet it just aint gonna happen.
Its all about supply & demand. Inventory isnt growing and homes are still selling as briskly as they were in 08, 07 & 06.
3 years into this prices are down 8-10%. I thought for sure it would implode by now but it didnt. I dont know why it didnt, & probably never will. Still - ive accepted it and moved on.
I don't know when the %50 decline will happen, but it will happen. Huge job losses in the defense industry and government have just began. It is going to get, ugly, very ugly.
"Its all about supply & demand. Inventory isnt growing and homes are still selling as briskly as they were in 08, 07 & 06."
ReplyDeleteAre they "selling" briskly or just pulled off the market?
"It is going to get ugly, very ugly."
ReplyDeleteI don't see how some areas can get much uglier. Reo's (increasingly scarce) have been selling for as much as 75% off peak. Do you honestly think those places are going lower?
Its great. Hopefully once the houses completely go back to what they are supposed to be worth, people that work for a living can again afford one. How can anyone justify value doubling in a decade where median income barely rose slower then inflation. Once the 'recession' passes and everyone realizes thay 'hey, those homes are nowhere close to worth that much' we will with clarity how the banks and government were aiding in the inflation to collect as much as 2X the interest. That or we will just continue down the path of Mike Judge's idiocracy.
ReplyDeletethe dc area has always lagged the rest of the country in terms of housing declines. the fact that pricing within the beltway has not plummeted as much, does not mean that it won't. sallie, freddie, fannie pay/paid high wages and the employees tended to own lots of stock. that's a lot of wiped-out wealth. throw in the layoffs from law firms, defense contractors, non-profits, real estate people and it's hard to imagine that this won't have a serious future impact on prices.
ReplyDeleteMedian incomes in the area rose +30% in the last decade -- +40% inside the beltway.
ReplyDeleteThe DC area hasnt always lagged. Northern virginia looks to be well ahead of the country and the Maryland side looks about the same as the US as a whole.
Maybe it’s simply my understanding of economics or maybe I don’t understand the vagaries of the housing market in the D.C., MD, VA area, but I have been consistently astonished to see over the last 3-4 years how this market stubbornly lags behind other markets, in terms of drops in real estate values. That’s not to say there has been no effect, I recognize that some areas have been hit hard, but others, little effect; and that this is seen as an indication of how special this region is. I am starting believe that perhaps those who say it (understanding that most have a vested interest in making it so) may be correct. Perhaps the D.C. Metro area is different? This is of course the nations’ capital you know, and just like the politicians elected by constituencies around the country, once they get here they find that things are a bit different. However, (continuing this analogy), they soon find – through loss of an election usually – that they are connected to the rest of the country (their respective constituencies).
ReplyDeleteSo also it is I believed with real estate. Sure, sure, we’ll lag for a time, but in time if the real estate of the country is seeing these kinds of losses and seeing as those in the direct or indirect federal sector (which a large percentage of workers in this region are) are living in an area so which has a cost of living way out of whack with there own, there is bound to be some type of back-lash. What/how? I don’t know. But, proportionally, there’s got to be an adjustment. Further, if – as is indicated in the article below - there is an adjustment in [how] we value that good, might that also affect the housing/real estate in this area.
"The home-price optimists insist prices are bound to return to their 2006 peaks. But there is no reason to think they have to. And if they continue to fall, Americans' relationship to their homes could change dramatically."
Source: Why home prices may never recover (http://articles.moneycentral.msn.com/Banking/HomebuyingGuide/why-home-prices-may-never-recover.aspx?)
Im not so concerned about esoteric concepts about a "DC backlash" or one among a million articles about why values may never come back.
ReplyDeleteIm just concerned about inventory and how we seem to be running through it at a staggering rate.
http://www.recharts.com/nova/nova.html
Perhaps the D.C. Metro area is different?
ReplyDeleteSingle most important factor in stability of DC home prices is the timing of the gentrification. DC's renaissance came later than many other municipalities (Chicago, SF, NYC, etc...), and the run-up in prices was mistakenly attributed to the housing bubble.
I think it's absolutely ludicrous for anyone in their right mind to think the housing market has bottomed out OR the economy has stopped free falling and we are out of the recession.
ReplyDeleteWTF are people thinking.
The bottom is not here yet! more loans still to adjust and prime loan defaults rising.
ReplyDeletewww.rentersmakeyourich.com
Housing prices have been artifically kept from falling by banks with holding foreclosed homes from market. When that bubble bursts, the second foot will drop. We're only half way down.
ReplyDeleteONly 7% of the defaulters have benefited from the bail out. Thosands of defaults are still in the offing. The banking system is still not stable - there is no liquidity. Even the congressinal comittee chairman was on NBC the other & she thinks house markets will be down by atleast another 25%
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