House Prices continue to UnTriple

[Crewleader]

Posted for Scott Ellis of Brevard County, FL, graphs by Roger Shealy

A few people have wondered why many homes seem to be entering foreclosure when they know the owners still have jobs. Are these people planning on moving away?

No, they are wising up just like people did in Boston in 1988.

Why keep up payments on a $230,000 debt when I can now buy the same house for $80,000, or rent it for $800 a month? People were walking up there and they’ll be walking down here, even if they have jobs, as they realize they are so far underwater they’ll never break the surface again. They also now have the option of discontinuing payment and living rent free for one to two years.

With many people reason will never trump hope. They will hold on to their ‘property’ until they have exhausted all sources of cash, and then end up foreclosed anyway.

Prices were straight up, then straight down, they’ll go even lower than when you started as you overshoot down, then a slight bounce to equilibrium.

House prices tripled from 1999-2005, now they’re un-tripling.

Scott

http://patrick.net/forum/?p=28236