[quote=briansd1]…Without government intervention, house price declines would have been more breathtaking, as you put it. Growth, from a lower low point, would have returned sooner. But I doubt economic output would have already come back above peak levels.[/quote]
We can agree on this, brian. I believe growth from a lower low point (end ’07/begin ’08 or even ’09) would have been preferable to what we have now as it relates to our local housing market.
I don’t work in the industry and only keep up with my (local) closings every 3-4 mos or so. It was SHOCKING to me (when I recently checked local closings since the summer in late November) how much prices have dropped, causing many properties around me to be “undervalued.” Contrary to what some (ignorant) poster(s) have stated about my area on this thread, there are many estate-like luxury properties on 1-4 AC lots within 2-7 blocks from my home. The only point I was trying to make is that the “good stuff” owned by the “best hands” in EVERY area will NOT be marketed in this climate, even if its owners were toying with the idea of selling. Current moderate/middle/upper middle income “working” buyer households are left with crap out there to choose from (majority are “distressed” sales) in which the seller has not been able to afford to maintain properly for part or all of their period of ownership. The only other buying option available is overpriced, over-encumbered new construction.
In the lower-priced “equity sales” that ARE currently closing escrow, they likely have been long-ago paid off and most have not had anything done to them in 30+ years (likely elderly sellers who have already or must now move in with relatives or an assisted-living arrangement). OR they sell to a very specific buyer who appreciates and will pay for a property’s unique location and/or what was recently done to the property (in the last decade).
Longtime owners with mortgages aren’t going to take a hit to their OWN recent cash investments if they don’t have to.
It’s difficult at this time to predict how long these conditions will be present.
