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  1. #1
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    Housing prices projected to drop another 25%

    Fitch said in its report that it is expecting home prices to decline by an average of 25 percent in real terms at the national level over the next five years, starting from the second quarter of 2008.

    And thatís the base case scenario.

    Some MSAs such as San Diego and San Francisco, CA are expected to experience home price declines by as much as 47 percent and 33 percent over the next five years, while home prices in MSAs such as San Antonio, TX are expected to appreciate by 7 percent.

    Link:
    Fitch Updates Ratings Model; Projects Steep Housing Price Declines : Housing Wire


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    Re: Housing prices projected to drop another 25%

    Well that might just take us back to where we would have been with a 3 to 4% average yearly increase which has been the historical average for the last 100 years.

    I always thought the flip your house and double digit increases syndrome was foolish. If this comes to pass, it will prove I was right.



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    Re: Housing prices projected to drop another 25%

    Quote Originally Posted by Bobber View Post
    Well that might just take us back to where we would have been with a 3 to 4% average yearly increase which has been the historical average for the last 100 years.

    I always thought the flip your house and double digit increases syndrome was foolish. If this comes to pass, it will prove I was right.
    Good point.



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    Re: Housing prices projected to drop another 25%

    I hope it goes down some more. I need to buy a house :).



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    Re: Housing prices projected to drop another 25%

    I live in Virginia Beach and to buy a 10-15 year old home, 1600-1800 sf, with a good school costs around $300,000. I am looking for a home currently but have decided to wait awhile to see what happens.


    Scott L., Yokosuka, Japan

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    Re: Housing prices projected to drop another 25%

    Quote Originally Posted by alaskaguy View Post
    Fitch said in its report that it is expecting home prices to decline by an average of 25 percent in real terms at the national level over the next five years, starting from the second quarter of 2008.

    And thatís the base case scenario.

    Some MSAs such as San Diego and San Francisco, CA are expected to experience home price declines by as much as 47 percent and 33 percent over the next five years, while home prices in MSAs such as San Antonio, TX are expected to appreciate by 7 percent.

    Link:
    Fitch Updates Ratings Model; Projects Steep Housing Price Declines : Housing Wire
    revision to the mean


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    Re: Housing prices projected to drop another 25%

    I sold my house almost 1.5 years ago, when I moved, for $50k less than I paid for it and I had bought it for $70k less than the previous owner had paid for it. The house dropped in value 120k in about 4.5 years and during that time it had about 60k of improvements made to it. It was a really nice house in a nice neighborhood.

    I did not like taking the loss but I did not want to keep paying for a house in another state and I did not see signs the market was going to turn around anytime in the near future. In a couple of years I may think it was a great move.

    I now am renting a house someone could not sell for about $500 a month less than the monthly payments would be on the house had I bought it and put 20% down.


    Last edited by ffelknirznarf; 07-24-2008 at 11:23 PM.

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    Re: Housing prices projected to drop another 25%

    Quote Originally Posted by ffelknirznarf View Post
    I now am renting a house someone could not sell for about $500 a month less than the monthly payments would be on the house had I bought it and put 20% down.
    That is a great illustration of why things are so out of whack right now. When I bought my first house in the early 90's my payments were about the same as what rent would have been. Home values have to come down and get closer to what people can rent or people will be better off renting. Also 3 or 4 times salary is a much more realistic value for a home and not the 10 to 15 times that some people have been suckered into buying.



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    Re: Housing prices projected to drop another 25%

    I bought a house in Newton a few years ago. Didn't get a bad price for it, but understood when buying that I intended to die in that house, because I don't buy the "house as an investment" line of thought.


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