Housing Roller Coaster

A super clever way to show what housing prices have done for the past 100 years in the US and possibly a good indication of what's coming next....

I'd love to hear your thoughts!

I can't believe that I will be buying a home soon.

The difference, we won't be having ANY fun on the way down.

This was cool though and a great way to educate.

Might be good if "soon" means 2-3 years. Might be bad if it means 2-3 months.

I think perhaps the point is, is that if you're buying a home to be a home and you plan to live there for 20 or 30 years, then that's fine, but if you're buying a home to be a good short term investment (like lots of people did 5 years ago) then that might not be super wise....

Definitely a worth-while visual. Analysts have been talking about an upcoming crash for so long now it is easy to just think they are bluffing because it hasn't happened.

My wife and I certainly are trying to plan for the future. We have a house that isn't outside of our means (even though we can afford much more) and we have no plans on upgrading. That's really all we can do at this point.

...other then pray...

Very interesting. I think that the one major difference that will keep the upcoming dip from being a full scale crash is that there are so many more buyers in the market now. Until the 1980's there was way more space than people, now we are begining to run out of space. I think that it may correct by even 25% but can't see it crashing as there is just too much demand.

I have never seen so many business buildings up for sale instead of for lease.

Something has to give!

I am dying to buy a building but I hate the thought of putting down 2 or 3 hundred thousand dollars and have it evaporate over night. I did that back in 93 and luckily it was only 30 thousand and not 300 hundred thousand.

Definitely not the time for the those with a weak stomach.

What to do, what to do?

Thanks for the perspective!




Colin, the demand is there, but not the funds to pay the ongoing prices!

Clearly there is more inventory than real buyers.

We put my home for sale a few months ago and we didn't get a single offer.

Only a few months back my neighbors sold at over the asking price in a couple of weeks. This were similar houses!

You mean the same analysts that have accurately predicted 28 of the last 2 recessions?

Holy Crap......that was totally cool!!!
Watching the coaster climb at the end was crazy.
You can't help but think that we're really in for it over the next couple of years.

It's obvious that the creation of all these creative financing techniques has really screwed the market in a really bad way. You know something is wrong when all of those old rules of thumb (eg. 20% down) no longer apply. Who realistically has that kind of cash to put into a house? I think people who had no business even considering entering the real estate market (because they had no $$$) have been murking up the waters for years. Up until recently they could get away with it because hope prices have been artificially appreciating and interest rates have been historically low. Unfortunatly this type of investing is no longer a safe bet. Unless you really see yourself living in a place for the long term and you can handle the payments on a 30 year fixed rate mortgage, you've gotta be out of your flipping mind to buy a house right now.

It wasn't that long ago when you'd think of a million dollar home as a mansion perched on the top of some hill in a super rich part of town. Now you'll see them in just about every neighborhood (in California at least). They're 3 bedroom, 2 bath fixer uppers with pathetic excuses for backyards. The younger working generation (25-35) have decent incomes and are ready to buy, but they cannot afford anything in this overpriced market. Either prices need to re-adjust or salaries need to increase in line with the housing market, or else you will start to see a mass exodus away from these areas.

I guess this is a topic that hits close to home
I can't wait for the market to tank!
I'll be sitting in my 2-bedroom apartment waiting until it does.
.....hopefully not for too long.

I was sent a couple of interesting articles this morning concerning real estate pricing. Here are some facts that struck me.
- Most of the Cities at the top of the list [expensive places to live] have either no developable land left or extremely restrictive zoning. These areas will be supported if prices fall as supply is short.
- For the U.S. as a whole, the five-year increase in the Case-Shiller Home Price Index was 63.7 percent. Only about 25% of total homes have changed hands or are new homes so even if the market drops by 50%, 75% of homeowners will still be up 13.7% (2.7%/year) over the last five years. But those 75% could still be in trouble if they pulled a bunch of money out and now need to sell.

So, what will happen? I still think that we will see a fairly dramatic downturn but nothing like a "crash." Sure, some areas will be harder hit than others but most will be okay.

I'm staying put! Kim and I bought out 4br home 10 yrs ago before we had any kids - at first it seemed crazy, but in hindsight it's the best thing we ever did.

Prices here in North Florida are pretty stable compared to y'all west coasters. We can still get a very nice home on a decent sized lot for under 400K.

That's Santa Barbara for ya!

Very little land left to develop, and lots of people who want to live here. I wouldn't be surprised to see prices fall here, but I'm not exactly expecting a crash. In this market at least.

haha, I am pretty sure SB falls under the "extremely restrictive zoning" category!
The is just a bit of land to the north of Goleta... They even make it really difficult to make mixed use housing go up downtown, crazy.

There was also an analysis done of a section of Amsterdam that has been continuously occupied for the last 400 years, and is pretty much the definition of prime real estate. Overall, prices tracked inflation and that's it (but with lots of highs and lows in between).

http://www.bloomberg.com/apps/news?pid=100...mp;refer=europe

Housing prices are speculative.