May 27, 2008
– Comments (1)
I'm amazed that no one even comments on this anymore... 14% down nationally! That's worse than I ever thought it would be in one year. I thought it could happen in CA or other bubble epicenters, but 14% nationally in one year is crazy.
I'm sure that eventually, the numbers will start trending "upward" and show YOY movements of -11% or so and people will say, "we've hit bottom."
Look at the last time things went negative in 1990/1991. YOY increases did not go above 3% until 1997/1998. 7 years of negative to flat housing prices.
Where will we be after 7 years of negative year over year comps, even if the YOY declines start coming in at -3% or so? If you buy a house now for $500,000 and lose 3% per year for 6 more years, in 2014, your value will be down to $415,000. Of course, you will be almost all the way down to $415,000 if the YOY numbers come in at -14% for another year (the house will be at $430,000).
If you lose $70,000 or $80,000 a few times, pretty soon you're talking about real money.