Okay, not really a prediction, but it seemed to tie to yesterday's post.
I use Radarlogic to monitor local price trends. Not perfect, but it allows me to compare prices over time. For example, current (May 31, 2008, because Radarlogic lags 60 days) Sacramento MSA price is the same as March 2003.
Again, I don't know where prices are going to go, but I feel comfortable in predicting a minimum 10% additional decline (and possible additional 20% decline, all on a local level, of course). A 10% decline, per Radarlogic, would take us back to May 2002 home prices. A 20% decline would take us back to May 2001 prices.
If we see 20% further local declines (which I am not predicting but could happen), that would mean that everyone who bought after March 2003, even with 20% down, would have negative equity. Pretty discouraging numbers, but certainly motivation to be a patient renter.
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5 comments:
certainly motivation to be a patient renter
I'd have to agree :)
Where are you getting that data from? May 30, 2008 price does not get released until tomorrow much less May 31 2008.
You are right. I mis-wrote. Should have been May 29, 2008.
SOMEONE PLEASE FIRE ME!
10%-20% decline from current prices? I think that is optimistic. 20% more from peak is my prediction. I think somewhere between 65-75% from peak for sac. Currently we are around 45%.
Maybe if 50% of the sales werent going to investors (the majority being the flip it in few months for a million profit variety) I would agree, but with foreclosures increasing exponentially and sales in the tank prices still have a long way to go.
Many thanks to Paul for providing material this week while I was overwhelmed with work and understaffed taking care of the kids (Mr. BT on travel with work).
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