Profile picture for J. Ryan Conley

How long does everyone think the housing market will continue going down?

  • November 11 2010 - Bellevue
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Answers (24)

"Pasadenan worte:The reason we went to war against Saddam Hussein had nothing to do with faked intelligence reports of potential weapons of mass destruction, but rather it was that Saddam had threatened to change the currency of exchange of oil from the U.S. Dollar to the Euro.  That would have undermined the U.S. dominance of the World economic markets, thus U.S. policy makers had to stop it."

So there is intelligent life on Zillow....

Thank you for presenting this important statement here. The more people know the truths the more they will connect the dots. It's a huge puzzle but you will be surprised who's built the puzzle to fit their agendas" 

"You Trust In Their Deceit, Your Mind Causes Your Defeat,
And So You Become An Invention"


  • November 13 2010
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Profile picture for RobScott1

This depends on the location. However keep in mind the rise started in the mid 1990's and lasted until 2006 or roughly 10 years. Although the worst maybe over, I believe you should expect several more years of very low appreciation if any. Buy your home because you love it and can afford it. Buy your investment property because it cash flows. Both of these can be counted on and are not speculative.

  • November 13 2010
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Profile picture for Netizen
Prices will drop until supply meets demand. The unknown factor in determining when housing supply will meet buy demand is that before 2008 during the housing boom, the average income in the U.S. was something like $50K. However, with unemployment not reflecting the reality of the situation (since someone making $50K could have been fired and immediately accepted a position at $25K to survive) for all we know, the real average income in the U.S. could have fallen by 50% or more. Complicating matters further is that before 2008, anybody with a pulse claiming to make X dollars per year qualified for a sub-prime loan.

The morbid reality is that if people must really qualify for a mortgage (by having their income and length of employment verified, not just fast tracked through a fake verification process based on touchy feely credit rating consideration) -- on top of having top-notch credit -- I see few people in the U.S. qualify for a mortgage at 50% or less of current housing prices! Worse, if the economy keeps spiraling downward like fast moving water in a flushing toilet, expect housing prices to reach the low that toilet reaches at the moment it completely empties (before water starts refilling the bowl).
  • November 13 2010
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Profile picture for Blue Nile
I agree with Kattie on the best source of data for tracking market conditions being the Zillow local info pages and Zillow quarterly reports.  But I disagree with her on the interpretation for the future.  But considering her position is "PR manager"; I'm not surprised that I disagree with her.

Due to government and other ongoing interventions, this issue is going to be drug out for a long time.  Those interested in tax revenue and minimizing government insurance pay-outs to bank depositors have vested reasons to not allow the market values to correct quickly.

Yes, it is true that the dollar is rapidly loosing credibility as the world standard for monetary exchange.  It didn't even have that status until after World War II, and it started loosing that status with the "Nixon Shock" in 1972 due to major deficit spending on the Vietnam war.

The reason we went to war against Saddam Hussein had nothing to do with faked intelligence reports of potential weapons of mass destruction, but rather it was that Saddam had threatened to change the currency of exchange of oil from the U.S. Dollar to the Euro.  That would have undermined the U.S. dominance of the World economic markets, thus U.S. policy makers had to stop it.  Besides, the U.S. markets were in free-fall at the end of 2000, thus the U.S. needed a war to create jobs, reduce available workers, and prop-up the economy.  (Wars have always traditionally been effective at doing that in the past).

Sure, it is inevitable that the U.S. will continue to lose clout as the world's economic strong-hold; but it is not being overtaken by any other foreign currency in less than 5 years.  The best present predictions are about 25 years.  And the biggest question is what the U.S. will do with it's strongly military based economy, and the U.S. 3 billion tons of Nukes stock piled with much still on trigger alert.  Congress already authorized building 3 billion tons more about 5 years ago.  The U.S. and World economic situation cannot even begin to be addressed until this issue is resolved.
  • November 12 2010
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It depends on where you live and how good are your schools. There is always a larger demand for areas with good schools. Look at schools before you buy real estate.
  • November 12 2010
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It is very localized.  There are areas around me that have already stabilized.  And there are areas around me that will take another 2 years to stabilized.  It all depends on where your looking!
  • November 12 2010
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In less than 5 years, maybe less than 3,  the US dollar will no longer be the world's reserve currency.  When that happens homes will be revalued according to the new adjusted value of the USD.  

Fortunately, for buyers, home prices will be a lot lower than they are today.

But unfortunately, our economy will be wrecked and everyone who held their assets in US dollars will be bankrupt and unable to afford the house.

got Gold?



 

  • November 12 2010
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Profile picture for James Sanson
I would not question the market as a whole. There are dynamics that for each market. We have all learned a lot I hope in this market. I would seek a local real estate expert in your market to show you stats. There clearly are things that we cannot see like shadow inventory and their future impact. From what I was told they will control those like OPEC. They will ease them into the market when they can. With the additional foreclosures coming I would maybe want to make sure I am dealing with a CDPE or a CIAS or both. They should know their stats. I question will be continue to decline in certain markets or will be go flat for the next five years. Just look back four years from now- 2006 the roaring 1920s of our time. How long did it take to recover from the 1930s? There are a tone of ways to help build answers- do talk with a 70+ year old person about our countries history :-)
  • November 12 2010
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Profile picture for karlaw
It's very difficult to say for sure, but unfortunately, we have another wave of foreclosures to work through, amongst other issues--so most likely another 3 to 5 years.
  • November 12 2010
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Profile picture for hpvanc
I am becoming more convinced that we have entered a long term general deflationary spiral.  This will put downward pressure on housing prices nationally which will have an effect on all local markets.  Japan entered such a spiral in 1989 and are still in it.  The US experienced one that began in 1873 and did not turn inflationary until 1900. 

I think it will be slow and gradual, or just plain flat, much like Japan and the US in the late 19th century, instead of short and steep like the more common one that occurred in the US in the 1930's.  Since housing prices track with inflation or slightly above, even when house sizes and modern conveniences, the same house normally depreciates relative to inflation, so if there is general deflation, we will see housing price depreciation until there is measurable inflation.
  • November 11 2010
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Haven't you heard?! The recession was over in 2009 and my sellers are telling me Obama is going to save values. So in conclusion, the housing market is going up, up, up especially with the new 600 BILLION Ben is pumping in the market! More money in the market means.....um....more money for our honest and ethical bankers! And maybe the price of a gallon of milk will be as much as gold is an ounce!  (sarcasm)  
  • November 11 2010
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Profile picture for James Sanson
WOW!!! What a question. Since 2007 I was saying April 2011 was my guess for Arizona. I figured anywhere from April 2011 and Fall 2011. However, that is an educated guess. There are so many variables here, so nobody can have an answer. I would look YTY declines in your market 2006 to 2007; 2007 to 2008; 2008 to 2009; 2009 to 2010. Then you have all of the ghost or shadow inventory, and Global things and Printing money, etc things that play into this, so nobody has an answer.
  • November 11 2010
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What I have read is for the next two years and maybe longer, 20% or higher. 5% is make believe. Foreclosures, after the current dust settles, will be doled out in proportions, in order not to decrease values substantially at one moment in time.
  • November 11 2010
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Profile picture for Katie_C
Sunnyview and Kathy are completely right -- it's really going to depend where you are. But nationally, our chief economist thinks we may see another 5% drop before hitting the bottom,  but home values will then remain fairly flat for 3-5 years. We just release our Q3 reports yesterday, and the fallout from the expiration of the tax credits was pretty evident.

Our best resource for keeping up on local home values are our local info pages. We calculate most metrics all the way down to the ZIP code level. No forecast there, but it's a good way to not only look at what home values are doing locally, but also at all the different factors that may be affecting those home values.
  • November 11 2010
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Profile picture for Blue Nile
Lady Chattel brings up a very good point about people still buying what makes no sense with funding that makes no sense...

The biggest issue right now is that the Federal Reserve (Banking industry) has been buying up U.S. Treasury Bills to drive interest rates down.  And the Chinese have been subsidizing home purchases by buying Treasury Bills to drive interest rates down.

And everyone knows what happens when you subsidize an industry... prices stay higher than they should.  This deficit spending is causing a hidden devaluation of the dollar in all industries except housing.  But when this deficit spending (interest subsidies) ends, the value of homes again will fall, and we will again have another wave of underwater foreclosures.  It is especially bad for those that can't stay in their "new" home for 30 years or more, as it will be impossible to refinance at the rates they had gotten with the subsidies, and they won't be able to liquidate the property without bringing money to the table...  Same problems we have already been seeing.  Which is why so many Realtors want to tell people to "buy now" due to the low interest rates, so that they can see a whole lot more of their "clients" lose the foundation of their living right from under them.  Which is why Realtors are member of NARcissists.
  • November 11 2010
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Profile picture for dacolan
Housing will rebound when jobs do.
  • November 11 2010
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Profile picture for the_country_hick
Bad loans reset or recast into 2012. Foreclosures can take over 400 days to complete from the first missed payment. That makes it 2013. We will then have 1-3 years of housing inventory to clear through. If the government keeps being a interfering factor slowing (or stopping) foreclosures it could be a lot longer.

One bad part of this is when people think that the market is going up a lot of sellers will think they should sell and that could easily drop prices more.
  • November 11 2010
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Profile picture for Lady Chattel
I am skeptical that we will ever get out of this......everywhere I look the banks are still offering ARM loans (so in 5 yrs this cycle will play out again when loans pop)....these loans are the reason that home prices have not fallen as much as they should.   Homes are priced at least 10-15% too high in my neck of the woods and based off my calculations of median household income vs. median house price, it takes 45% of a median income to purchase a median house In my county.  Then add to the bruising is that few people have a 20% down, so of course the only way to fuel the market is to keep up with creative loans.  As a buy-fence sitter, it pisses me off that in order to buy I have to "overpay" or spend too much of my income to do so....well, I could spend what my income dictates, but why would I buy a 3/2 Townhome when I rent a 5/4 SFH for the same price?

We are considering just leaving this overpriced area for a simple life where home prices take up 20-30% of income.
  • November 11 2010
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Profile picture for kathiesears
Sunnyview is correct.  This totally depends on where you live.  Areas where prices were inflated the most haved dropped the most and were some of the first to fall.  Most likely these same areas will be the first to see price appreciations.  In a small rural lake community like Somerset, we have probably reached a bottom, but right now we are only moving sideways... Nationally the average is going to continue to slide as more and more foreclosures continue to be the biggest seller.  I feel it will be 1-2 more years before we see price recovery...
  • November 11 2010
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I agree with John, about 3 years.

I don't think we have seen the the worst of it yet...unfortunately. 
  • November 11 2010
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We have seen increases in home sales and prices in the past two years. We are now seeing some stablization.  : )
  • November 11 2010
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Profile picture for klarek the realist
Nationally, probably another year.  All those gains from the tax credit are going to have to be wiped out, along with whatever drop in prices we were going to see without it.  It should happen swiftly though since the lack of first time buyers and  increase in foreclosures will allow for some steady price discovery.  I hate to put a timeline on these things, but my guess right now is one year. 

Also, as Sunnyview stated, it will vary a lot by location.  I also think that the tiers will shift differently.  That is, higher-end RE will fall more and for a longer time than lower-end which has already fallen significantly.  The reverse of the move-up effect on high end price changes will take some time to unravel.

It's kind of sad that we COULD have already hit the bottom and be in "recovery" mode were it not for the first time homebuyer tax credit.  We should send our thanks to Senators Reid and Isakson for delaying the recovery and enticing more suckers into over-paying for houses.
  • November 11 2010
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Most economists and analysts are forecasting about 3 years, corresponding with the amount of bank owned inventory that needs to be sold.
  • November 11 2010
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Profile picture for sunnyview
Depends on the area. In my area, I think it's got another 8-9% to drop based on historical income based pricing and rent ratios. In my closest large city, it's probably got another 10-12% to go. I figure that it'll take about another year to get halfway there and another 2-3 to see numbers creep up in any sustainable way. Time will tell.
  • November 11 2010
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