This headline has me shaking my head…
Bad news for housing: Prices flattening
By Les Christie, staff writerDecember 29, 2009: 10:20 AM ET
NEW YORK (CNNMoney.com) — Home price gains earlier this year flattened out in October, according to a report issued Tuesday.
The S&P/Case Shiller Home Price index, covering 20 of the largest metropolitan areas in the nation, was unchanged in October, after four consecutive months of gains. The index is down 7.3% from 12 months earlier.
http://money.cnn.com/2009/12/29/real_estate/October_home_prices/
It seems that everywhere the emphasis is on a desperate desire for things going back to the way they were in the financial and real estate markets. Don’t these “experts” get it? That’s exactly what we don’t want! I realize that people who bought at the peak got screwed, but why make houses unaffordable all over again? If I sold my house today, I’d get at least $100,000 less than what it was allegedly worth a few years ago, but that would be at least $100,000 more than what I paid for it — which happens to be about what we’ve spent on improvements. So with the mortgage interest being tax-deductible we come out even, and that’s fine with me.
The real estate bubble was another gigantic pyramid scheme, with unqualified buyers and investors being pushed into the bottom to hold up a few who ran the schemes. In a bizarre irony, it was the collapse of Wall Street that forced Bernie Madoff to come forward. In a way, I can almost understand why the SEC failed to nail Madoff. Was there any real difference between what he was up to, and what the deregulated markets were doing?
Speaking of Madoff, there were reports everywhere last week that he had been rather badly beaten up in prison. Since then I’ve seen nothing about it.
Hi Paul — I’m with you on Realtors. They seem willing to let the banks take the blame for what happened, without admitting they’re the ones who pressure buyers in the first place.
I hate moving, but on the other hand it can force decisions on what to stays and what goes, and that’s something collector types are usually reluctant to do.
What you did at eighteen was a real Tale to Astonish — starting life without hesitation, getting married (but not “having to”), and buying a house. You were smart to get into real estate so young, because the opportunity cost I paid by going to college was that I wasn’t able to buy my first house until I was 32. I knew we were buying at the peak, and when the recession hit hard in ’91 we almost went into negative equity. By the time we sold that house seven years later, the market had bounced back enough that the selling price was 20% over what we’d paid.
So I am sympathetic to those who bought at the latest peak. We have neighbors who are in that crowd, as are the people who sold them the house and moved to a more expensive neighborhood in town.
Doug,
For people like you and I, who bought homes quite a while ago, the collapse of the real estate market hasn’t been that bad for us…but you must know that people who bought from 2004-2007 are very concerned that the prices of homes will never return to the high prices they paid for their homes. For many, their entire equity is long gone. (so much for the vast knowledge of our “professional, ethical Realtors.”) I recently found a chart showing that real estate has NOT really been a great investment over the past 70 years or so…barely keeping up with inflation. We’ve recently moved to North Carolina…into a brand-new subdivision of large, all-brick homes. We bought one on November 13th and they’ve sold 8 more since we bought. So, I guess if the homes are priced “right” they are still selling fast.