Signs of Stabilizing Prices, and the Weekend Poll

I can't recall which company it was (though you can probably find it on Bloomberg.... maybe PMI or HSBC), but it recently released a report that said that the DC Metro area has a 92% chance of falling prices. IMO, that decline will be 20-30% by the time the second quarter of 2011 arrives.

Following up - PMI. ERET second quarter 2009 report. 91.7% chance of a decline in the Washington Metro area.

http://www.pmi-us.com/econ/index.html#ERET

or

http://viewer.zmags.com/publication/e1e7bb7d#/e1e7bb7d/6

burkemic99: I read that as well. I also read this story from the Post that said basically that high-end homes around here just aren't selling:

http://www.washingtonpost.com/wp-dyn/content/article/2009/06/26/AR2009062604413_pf.html?ref=patrick.net

My guess is that all the $200k to $350k properties are getting snatched up by first-time buyers seduced by the $8,000 tax credit, but no one is trading up. Eventually the high-end will capitulate and have to lower its prices. This will affect the mid-level on downward in kind of reverse trickledown economics. I am thinking that anyone thinking they got a bargain $300k one-bedroom condo this spring will be kicking themselves in two years when they see they could've gotten a mid-size two to three bedroom rambler for the same price. What’s happening right now is nothing more than the proverbial "dead cat bounce".

burkemic99: Is this the story you were originally alluding to?

http://www.bloomberg.com/apps/news?pid=20601213&sid=aEwbzPfaEGw8&ref=patrick.net

Stabilizing huh? That's pretty hilarious.

I have 2 friends that are trying to sell their houses and both had to drop their price by 5-10% and still no interest.

The condo market in the area is still declining in price. Look at your own ads on your site for the Jameson. A few weeks ago, their ads said "new condos from the mid 300's", now they say "new condos from the high 200's."

Trulia comment is just like the people in the government, economists who reported that we hit bottom and continue to do it, only to be 'shocked' that things continue to get worse. For some reason 1 report of good news seems to make them think we're out of the woods and then more bad news. Again, how about we string together 3-6 months of good news before saying we've hit bottom in the economy.

As for these #'s, look at where prices were and look at where they got to. The % decline in the Washington area is no where close to where it needs to be to make housing 'affordable.' My parents home in Bowie was around $150,000 before the boom and then went up to $350K with NO REASON WHAT SO EVER, and is now down to $280K and falling (they never intended to sell but they should have). And the economy is still getting worse. Now you tell me why someone should spend even $200K when nothing changed in Bowie to make their house go up that much?

The majority of people in the USA need to 'wake up' when it comes to home prices. Stop buying things that aren't worth what they are and putting yourselves into a no win situation and locking yourselves into a debt situation that if 1 thing goes wrong, your life can be ruined. Housing in the DC/NOVA area is still far from 'Affordable' and we need prices to come down so people can not only have shelter, but money for other things.

One other thing that the government should do is tax anyone who flips a house something like a 95% sales tax.

If you notice, what got us into trouble the last 7 years.

Short sellers on Wall Street and house flippers on main street (along with giving loans to people who could never afford them).

Our country has turned into everything about short term gain vs long term growth and stabilization. We need to make housing about it being a shelter and not about appraising or being an ATM.

We also need to put in tougher broad regulations. Things like a minimum of 15% down payment on a home (if you cant save you can't buy), and that the mortgage itself cannot be more then 35% of your take home income to keep people in homes they can afford realistically along with other debts they have.