[ex-Texan]

"Lenders Predict Housing Prices Will Drop 10 - 20 Percent . . . "

They must still wearing rose colored glasses out there in "Mortgage Broker World." As for myself, I suggest a 15% - 45% drop in prices is more correct nationally.

One recent example is from Boulder, Colorado, a very hot!, hot!, hot! market according to local realtors. It was listed in September, 2004 for the eye popping price of $ 2.28 million. This house has just sat on the market all that time. Recently, the price was reduced down to $ 1,275,000. That is a 45% reduction already. But the automated appraisal site Zillow has the house valued at only $ 745,000.

What's our hypothetical buyer to do? I mean after the house of cards falls apart. I have some suggestions but will keep most of them to myself for a while. Hint: My suggestions involve putting bounties on ruthless crooks. Just joking, people. I would never make that recommendation in a million years. [Need more info?] Our buyer can always punt. Punting is a good tactic, especially today.

[brownsfan]

What is this? A bunch of charlatans. Tell them to read FR, there is no bubble.

Not a big issue for me... I'm in Ohio, we didn't "bubble" much. No one wants to come here, and I'm ok with that!

[festus]

I'd love a 20 to 30 reduction. I want to buy another home.

As to the 13 pct of lenders who think "the sluggish job market" is the biggest threat. What sluggish job market ?

[xcamel]

Idiots do not make for a bubble - unless they're blonde.

A bubble happens when "honest criminals" allow > 50% of the people to by homes inflated in value by > 30% that they couldn't afford even at it's corrected market value.

[Petronski]

[riverdawg]

"Recently, the price was reduced [from $2.28 million] down to $1,275,000. That's a 45% reduction already."

There may or may not be a bursting housing "bubble" (however defined) in Boulder, CO, but declines in *asking* prices provide no evidence of it. Sellers often put highly unrealistic initial asking prices on houses for all sorts of reasons: greed, delusion, incompetent or unscrupulous listing agents, etc. My medium-size city away from both coasts has not experienced a housing bubble; selling prices have increased at an annual rate of 4-5% for the past 20 years. Three years ago, we bought a 3000 square-foot house on a one-acre lot for $293K. A year earlier, the seller had listed the house for $375K. It sat unsold for a year, through asking-price reductions to $349K and eventually 325K. There was no "bubble" except in the mind of the seller and his complicit listing agent.

[vin-one]

first of all, Zillow is a joke, secondly the million dollar market has never been as robust as the normal market. I don't believe there is a bubble, just a slow down and a correctiong of the over inflated market. Most areas have already seen a 5%correction.

[austinite]

There is no bubble, nothing to see here. Move on.

[dakine]

What is "zillow's" agenda?

[Proud_USA_Republican]

I'm currently in offer stage of buying a condo near downtown Seattle. They listed at 368K, I offered 350K, and it looks like they are going to accept. Heard the guy works in tech, but they have to move to another state for a new job starting next month, so they are somewhat motivated to sell.

Analyzing the comps my realtor has given me. I'd say about 60% of condos/homes being sold are still getting asking price, BUT, the asking prices are more realistic of current market which has been slowly cooling since January. You see many selling for 3 to 5% below the asking price now.

I thought the asking price was just a bit high, so I offered about 5% below price.
Two years ago, sellers with time of their hands were just throwing out rediculous ask prices seeing if some desperate moron would agree. Prices are still pumped up to extremes in certain markets. The property I'm trying to buy is in a area that still has a lot of demand, so I know that even if the market continues to cool off, long term, It's going to be a good investment.

[HamiltonJay]

[D-Chivas]

You know, eventually certain parts of the country will run out of people able or willing to pay $750,000 for a 2 bedroom ranch.

That's not really a bubble. It's more like the occasional pocket of air rising to the top of your bathtub after an evening of Mexican food.

[wardaddy]

Bubbles don't burst...they just fizzle and not universally

this is primarily a residential longterm uptick

it's been going up homewise here in nashville metro since 91 more or less

and folks just keep coming

[thoughtomator]

What? I'm not a tinfoil-hat doom-and-gloomer? I might need to re-evaluate my self-image (and possibly use more hyphens)!

[Old_Mil]

A year ago, 46 percent of lenders believed we were in a housing bubble. Today, that number has climbed to 66 percent - and many of them believe a correction is imminent and could lead to a drop in housing prices of up to 20 percent."

Like you, I'm thinking that 20% is a ridiculously optimistic figure. What is going to happen to all these "interest only" homes when problems occur? People are going to walk away and let the banks take them.

[Uncle Miltie]

"When asked to select from a list of six issues that had the most potential to hurt the U.S. economy, 38 percent of lenders named the federal budget deficit."

Which puts their credibility in question. Name the person harmed by a budget deficit of the proportion of GDP we have today. It just isn't that big of a deal.

These bwankers probably want a tax increase to solve the budget deficit.

[Notforprophet]

Ping for later

[LukeL]

When I see ranch homes going for $160,000.00 in a suburban area that is 30-40 miles away from a major city I know the bubble is going to burst.

[Mini-14]

Thanks for posting this article. I know you have beating this drum for a long time -- I will use this information to my advantage.

[patriot_wes]

"Two-Thirds of Lenders Nationwide Say U.S. in Midst of Real Estate Bubble"

That ain't the half of it. Take a look at gold & silver prices, value of the dollar, the balance of trade,etc, etc....

I forgot - Katie going to the Collective Broadcast Service...