Looking at home prices in my area leaves me a little confused. They all do in fact seem to be stabilizing, but are all still way above where I expect them to stop. Not sure whether that is a sign my expectations are wrong, or whether this is just a false upturn. Looking at the graph I can't help but to notice just how symmetrical they are around the peak. Prices have gone down at about the same rate as they came up. Maybe that trend is about to break, but with high foreclosure rates and high unemployment rates I am still betting on hitting inflation adjusted 2000 prices(about 1.25 times the 2000 price). One or two towns is even there. Looking at the areas they range from Pico Rivera which is almost there only having another few thousand dollars to fall, to Brea which should go down more than 100k more to match my guess. If nothing else we are most of the way to my expectation so I won't have been too far off if I guess right.
There really is no risk in waiting, prices simply aren't going to rise rapidly. There are just too many people who watched their friends get burned. At the same time rental prices are really quite reasonable in comparison to the price of owning... Even if prices don't fall, following the ultra-conservative rule of only buying a home that is three times my income, there are many areas where I could afford a house today. All I must do is get to saving a down payment. Whether or not the market is bottoming out now, by the time I can save money it will have.
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