Hello everyone:
We are all wondering when (or if?!) prices of our houses will come back. I read a very interesting, and telling article in an appraisal periodical I get here in Blogsville entitled What Now? in the October/November 2008 issue of Appraisal Press.
It shows the charted course of the "Case Shiller Weiss Home Price index versus the U.S. Bureau of Economic ANalysis figures for per capita income, but each is benchmarked so that the values in the first quarter in 2000 are "1.0" and all values for each series before and after are relative to the date's value."
"The housing boom peaked in Q2-2006 at the index of 2.21 relative to Q1-2000 meaning homes had risen by 121% in six years. income had risen to an index of 1.27 relative to Q1-2000 indicating a 27% increase over the same period. Homes values would have to drop between 17% and 26% from current levels to reach this equilibrium."
Can be seen at: www.appraisalpress.com/news/articles/what_now/
Home prices nationally still have to drop 17% to 26% from their current levels before reaching bottom in 2011. That time span would be a five year downturn, just like during the last major crisis."
I do not have to tell none of you that we are not done with this "correction" as they call it in the stock market. We have in the past, and now, we will get through it. Many of us remember the last time it happened back in the 90's. Things recovered and we moved to new heights. The truth is that we all knew deep down inside that it was inevitable, but on the bright side; it is inevitable that prices will come back.
Let me point out however, that we are not going to have to wait that long until 2010. It will not be a light switch going on instantly, but more like "dimmer" if you will, gradually getting back in a more positive side. We fill feel the increase in loan activity and values coming back, slowly, but surely. Personally I feel by the early summer of 2009 will things get noticably better and improve in a more orderly manner than what we had this past time around.
What are you thoughts out there my friends? Some of you, I can always count on for your thoughts, and it is appreciated that someone is actually reading this. :-)
All of you take care, and enjoy these 60's temperatures; and good luck to my Liberty High School football team in the playoffs (Had to get a small rah-rah in there).
Sincerely,
Jim