The market in action. Now middle class Californians may actually be able to afford a home.
In other news today, it has been discovered that water is wet.
Bubbles have to burst eventually. They can’t keep expanding forever.
This is just the tip of the iceberg. The Northeast is next in line. New York City prices have a long way to fall.
Hindsight is always 20/20. We should’ve sold at what we now know were peak prices. sigh. We’re stuck...upside down. We. Want. Out. Of. California.
This should restart the market in Kali.
That's a good start...
A free market is great, but not when addressing a basic life necessity: shelter.
Prices have been artificially high since "flipping" became the lazy man's get-rich-quick alternative to work.
A loss of 38% on the way down negates a rise of 61% on the way up.
A $100,000 home that lost 38% or $38,000, is worth only $62,000.
A gain of $38,000 on a $62,000 house is 61%.
So you just lost 61% of appreciation. That’s a chunk.
And that 38% drop is just for year over year from November 2007. There are many homes in the Sacramento area near me that have lost over 50% of value from peak, wiping out fully 100% of the houses appreciation! Half-price sale, anyone?
That is great for home affordability in California. Of course, dang painful for anybody who bought at the peak or anybody stupid enough to have refinanced and wasted the appreciation. Welcome to foreclosure. But somebody is going to get a fair price on your home.
The point is, a 38% drop negates a 61% rise. That is a VERY significant increase in affordability.