Some has claimed that the housing bubble is hyped and that not much has happened. They are not concerned about falling prices as there will be a soft landing.The housing bubble snowball has just started to roll. The snowball in the picture may look small and unthreatening, but it is just starting out. Wait, it will grow bigger, become faster and have more force.
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In my opiniom, not every market will "crash". The ones that have skyrocketed the fastest on speculation will suffer the greatest "correction".
ReplyDeleteI did not mean to imply that 'every market' will crash.
ReplyDeleteThe analogy is simply that the housing bubble is like a snoball going downhill becoming bigger, faster and more powerful.
well detroil will fall the least amongst metros..
ReplyDeleteWhat do you think will happen with the Baltimore market. It seems that most of the growth there is driven by people priced out of DC and by speculators hoping to sell to people from DC.
ReplyDeleteThe school districts are so marginal there and the commute
is about one hour each way. The attractiveness of Baltimore
would be gone for DC bound commuters if a price correction
in NOVA/DC/MD makes it more affordable.
Maybe, maybe not about people moving out of Baltimore. Prices low enough to make people sit up and take notice probably won't arrive til 2007 sometime. In the meantime, people are building new lives.
ReplyDeleteAlso, keep in mind how much further money in Baltimore goes. Bolton Hill, Charles Village, Federal Hill -- even after a bubble, you'd still be paying a hefty premium to get the same amount of space and land in D.C. Something a parent pointed out to me was "since we don't have to spend on much on housing, we can enroll the kid in better private schools".
Maybe the people who found Baltimore distasteful will move back. Still, Baltimore has its charm. Yes, it's a more dangerous city than D.C. but it happens in pockets, again like D.C.
I ask this question because I'm seriously considering buying a home there. I can get a 2000 sq ft house there for what is costs me to rent a 600 sq ft. apartment in College Park. As for higher crime rates, my car was stolen 5 days ago and there was an armed robbery a few nights ago just one block away. Compared to DC, I don't think Baltimore is any worse( I'm no fan of DC btw ).
ReplyDeleteSome markets will have a strong correction- 20-30% or even more in the areas with the most specualtion and overbuilding. However if the decline becomes a spreading economic illness, areas that that have had strong but not silly appreciation like me in Connecticut will still decline- (I feel a 10-15% decline in central CT is likely) In our(Connecticut) housing bubble crash which began in 1989- prices fell 25% on SFH and 45% on condo's (from 1989-1996) When prices stopped rising in 1988- everyone predicted a soft landing and no crash- well by 1990-1991 that hope was proved wrong. So we are early in the process currently. You will begin to see further slowing later this year, in mid 2007 panic will really set in. The process is slower then a stock market fall- but just as deadly- and longer lasting. The media is largely ignorant-and prints the 'positive propaganda' when the truth sets in it will be a snnowball rapidly growing in size and speed.
ReplyDelete