this is not JP’s house, but I think it illustrates my point.
let’s take a recently closed UTC home 4318 Cozzens, 2687 sqft, closed for $685k.
going back to 2000, there’s couple of homes a block away:
4224 Karensue Ave, 2100 sqft sold for $432,000
5986 Karensue Ln, 3000 sqft sold for $550,000
since the sqft of the subject home is smack in the middle of these two, let’s just average them out to a year 2000 price of 491k.
interest rate back in the days was 8%, at 3.5% down, monthly mortgage was $3470.
moving forward to 2011, at 4.25% and 3.5% down, monthly is $3200.
not saying the folks that purchased in 2000 can’t just refi to a lower rate now, but back in the days they committed to that purchase at that monthly carrying cost probably without realizing interest rate would get so low in the future.
just remember what the government is trying to do, suppress interest rate, bring down value of the dollar, in order to artificially keep prices “up.” so you do not see nominal drops. But the drops are here. via inflation adjustment and the fact that JP is able to find a 3% down 30 year fixed loan for 4.25%.
