This is a great and timely post because I, too, am “exasperated” and confused by all the conflicting data flying around. Some indicators are claiming a “bottom” (such as Robert Campbell’s “Crash Index” in his newsletter that I get) while other indicators (such as my wallet!) are saying no way, jose.

Despite supposedly expert indicators such as the crash index, my gut is just not seeing a bottom right now. With all the Alt-A recasts coming down the pike right now, unemployment sucking… and I am not sure how secure my own job is right now. I want to get something on a fixed mortgage for absolutely the lowest monthly payment I can get, so if I do lose the current job I can still keep my dwelling on a lower income.

Rent is just right out. Rent gets hiked every year and as I have complained before, my pay has not risen to cover it. In today’s sucky employment market, jumping to another, higher-paying job is looking unlikely at best.

So what would a price look like today if it was truly equivalent to the bottom we made in 1995-6? Well, I just happened to look at some condos in my area back then, which were selling for $100,000, and I took the CPI figures (use “Consumer Price Index History Table”) and calculated what the equivalent price of that place would be today after inflation.

Turns out a $100,000 condo in 1995 would be equivalent to a $140,500 condo today because of inflation. This is equivalent to about 1999-2000 “nominal” price per Zillow (same exact condos). To top it off, these actual same condos that I looked at in 1995 are currently selling for $200,000 or somewhat above (well, actually, being *offered* for that). So, this implies no bottom yet, at least in my area.

But all this implies a “normal” market where all the foreclosures come out and settle prices back to a realistic level. Can the government(s) and the banks jimmy the market and keep these prices up at bubble levels (and out of my reach without a long and exasperating commute?) I worry…