To The Tune of “London Bridge is Falling Down”

S&P/Case-Shiller Housing Price Index

Housing prices are going down, going down, going down,…

In some markets, the picture looks pretty grim:

S&P/Case-Shiller Housing Price Index

Of course the markets that are down so much are the same markets that were going through the roof just a few years ago. Things are fairly normal in my boring old town. How about your locale?

You can read the press release from S&P here (PDF).

11 thoughts on “To The Tune of “London Bridge is Falling Down””

  1. We have been *floored* to watch the housing prices in our neighborhood continue to rise steadily. Houses are selling within a week of listing as well. It’s insane! But I live in a very desirable town that has severally limited growth so there are NO new houses and nowhere else to buy if you want to live here. It also helps that our neighborhood is the bottom of the market and in a good location.

    In communities around us that gave free reign to developers every other house, literally, is in foreclosure or on the market and new houses sit empty. People were SO CRITICAL of our town for limiting growth, saying it inflated housing prices, but we’re actually doing OK and I’m glad!

  2. Dallas is down 0.1% according to that, which is an average of course. Many areas of Dallas are seeing 5-8% growth (which is pretty typical around here). We never had a run up in prices, so I’m not worried about a decline either. Plus the population here (and in many TX cities) is expected to continue to grow at strong rates.

  3. I have access to MLS data through my wife’s subscription. I pulled about 24 months of ‘sold’ properties in my zip code (I live in a rural area 20 miles from Columbus OH) and I’d estimate prices are down 15% from their ‘peak’ maybe 18-24 months ago.

    We were hit with a number of factors: higher gas prices, tightening of mortgage standards, oversupply of houses, and the continuing decline of our local schools.

    The good new: my house would still sell for 65% more than I bought it for, just not the 100% more it appraised for 24 months ago.

  4. In my immediate area of Mountain View/Palo Alto, prices are down by a few percent off their peaks, although properties are still selling. This area has always been expensive, so there were relatively few subprimers here. I guess another factor is that the sort of people who bought subprime tend to want big (>2K square feet) houses, and big houses don’t exist in this area at any price. In my immediate area, Google buyers are supporting prices; if Google tanks, it will add a few more percent to local RE tankage. (Google’s main complex is about two miles from my house.)

    In general, the further one gets from the Bay, the more things have tanked. Subprime and high gas prices are killing real-estate in places like Tracy and Los Banos, which had incredible runups in the past few years. Also, other “big house, long commute” areas like Pittsburg (CA) and Hercules are getting hit hard.

    Fortunately for us, we bought our house ten years ago, and even if we’ve lost 10% off the high, we’re still nearly double what we paid. (and we never did a cash-out refi, although we did do a refi to go from 7% to 5.5% fixed in the early 2000s)

  5. Things are going smoothly around these parts. Of course, our locale is atypical when compared to other parts of the declining housing market. We don’t live in a subdivision, we don’t live where there is any new building going on… it is just a very rural and mature area that hasn’t really been a part of the real estate boom of the last 20 years, so all of this outside market behavior hasn’t done much to change housing prices around here.

    I have noticed that some of the listings are on the market for a bit longer than average before selling, but the prices don’t seem out of whack, it is probably more due to the fact that it is harder to get a mortgage right now and the fact that we aren’t in an area of explosive growth or of super-desirable location.

  6. I live in Santa Maria on the central coast of California. I would say prices are down about 20% from the peak. Not the end of the world considering we had a run-up of nearly 60% in the last four years. People who bought then (like me) are still up 40% on the price and owe four years less principle on the loan, not a bad deal at all.

  7. Prices are down only a little here in Gloucester, VA. Owners are reluctant to drop prices, especially in the coveted waterfront areas. More importantly, new houses aren’t selling. Some aren’t even being finished. My little county jumped into the housing boom too late, I think. There is a development in our Courthouse area (downtown to you city folk) where the houses start at $330k. Nobody that lives here, and especially nobody that works here, can afford that. A couple have sold, most haven’t, and some aren’t even finished. There are several hundred thousand dollars in mechanics liens filed against the builders, and the head of the company has disappeared. The houses didn’t sell, so he couldn’t pay his suppliers, and he apparently skipped town.

    That was a 28-home development. Our Board of Supervisors just approved a 1000+ home golf-course community to be built on land so bad even the Indians didn’t live on it 400 years ago. I hope the builders have the sense to not go ahead with their plans now that the market is on the way down. This used to be a fishing and farming community, and now we’re trying to be an upscale suburb of the greater Hampton Roads area.

    The good new for me is that my house has more than doubled in value. I had an ARM before ARM’s were cool, and it was a sensible one. It had a cap on how high the interest rate could go, no balloon payments, no crazy interest-only stuff. I just did a re-fi, went from a 30-year to a 15-year (I had 18 to go on the original)rolled up my first and second mortgages, paid off credit cards, and got some cash out for home improvement projects. The best part is, my monthly payments are lower, I still have almost 40% equity in the house, and assuming I don’t make any extra payments, it will be paid off 3 years early. I’ll be 57 when it’s paid off, so I won’t have to worry about making mortgage payments when I’m ready to retire. We talked about selling it and moving away from the encroaching city, but even if it sold for the appraised value of $177k, we couldn’t buy anything better for that price.

  8. 3 markets i know are: santa rosa, norcal, where i live, down minimum 25% from peak 2 years ago across the board. millbrae, just south of san francisco, where in laws lived, down just a tad, if at all. third, my mom lived in a carpinteria condo (just south of santa barbara). totally down for condos in that toney area. 20% or more from peak. always found it interesting that my house, 2800 sf in santa rosa 1/2 acre, in laws 16oo sf in millbrae tiny lot, and the condo in carpinteria, near beach – three distinctly different homes in three distinctly different environments all went for more or less the same price.

  9. Well, I for one am hoping prices keep going down, since I think they are still way overinflated. Of course, I’m a renter and not a homeowner.

    The new condo project 3 blocks away (which is still selling its condos for a whopping $550K to $1 million plus) has had a sign out front for several months that it’s 30% sold — haven’t seen that 30% change. Of course, I think they are insane to try and get those kinds of prices for a CONDO in this immediate area (where a moderate HOUSE is still between $250K and $400K) and a tiny or less maintained HOUSE can be had for $150K. I want one of those moderate houses and I want it for less that $200K.

  10. that picture may look pretty grim for homeowners, but to prospective housing buyers, that picture looks awesome.

    margin of safety?

    also, prices won’t fall forever. Since the US has been in existence, land has averaged a 7% increase in price every year.

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