House prices seen falling 30 pct

[spinbaby]

http://news.yahoo.com/s/nm/20071206/bs_nm/usa_economy_housing_dc;_ylt=Ajoq5l_2yXZX34GQQrY8JCgDW7oF

Many of those people who get to "save" their mortgage by freezing the interest rate will still be paying on a house that's worth 30% less.

[TahitiNut]

1. I have a feeling that companies aren't eager to foreclose where the market price ....

... won't cover the outstanding principle. I'd be willing to bet that the federal intervention is designed to let companies be more 'efficient' - increasing (or propping up) the percentage of foreclosures where the market value exceeds the balance owed.

[dysfunctional press]

2. ...in SOME markets.

it won't be a nationwide phenomenon.

[glowing]

3. I believe you are right... I got a foreclosed home in a good area..

and walked into equity... I learned from my neighbors that the woman was loosey goosey and puposely let the house go.. she met some man on-line, dropped her kids off at he ex-hubby's, and flew off to Jamaica to live. Before that, the house was rented off and on. My neighbors love that I have a husband and a step-son and that we do yard work, trim our trees, put up Christmas decorations and subsequently keep the homes on that street worth more money.. There are 2 rentals on that street. One is next to my house and needs some work. The other is a little bit down, and is beautifully kept. All in all, my house is not depreciating in value and once things stabilize a bit more, it will increase back to normal.. right now I have 20,000 in equity. Normal stable times.. I'll have 30-35,000. Its a good neighborhood and really hasn't seen much difference in prices.. they only dropped about 20-30,000... and that is good because they were a bit high.. I live in a smaller home.. homes in the whole area are diverse in size and price... but the adjustment is good... helps with the property tax appraisle on people already in.

[spinbaby]

4. I think it will affect most of the country to some extent

Even here in the Pittsburgh area which wasn't hit by the housing bubble, realtors are telling me that houses just aren't moving and that prices are slipping. Not the California effect to be sure, but still a slumping housing market.

We're actually in the position to be pleased by this--the mega housing development that was planned for the bird sanctuary near our house has been postponed indefinitely. I have no idea how a property can be some kind of a designated flyway sanctuary for water birds one day and slated for a housing development the next, but it's fortunately not going to happen soon.

[dysfunctional press]

8. to some extent- but not a third of their value.

not many markets are going to see THAT large a drop in value.

[Warpy]

5. My dad's house in Florida has already fallen that far

WAY below what I sold it for, and people thought I was nuts for selling it for so little.

Housing was overbuilt in too many areas. There is going to be massive downward pressure on prices from that, alone. In addition, lenders are going to be very picky about who gets into the market, so the pool of buyers has been shrunk to nothing overnight.

There is nothing they can do from the top down to help this mess. It has to come from the bottom up. You can ignore demand side economics for only so long before the whole economy topples over.

[madokie]

6. something tells me a house like ours will only go up

our house is a little over 1100 sq ft, plenty of space for the wife and I or about any two persons. As the defaults goes up our house will be starting to look pretty good to some of those who overstepped and lost everything they have. thats what I'm thinking anyway. that would be fine with me cause I would like to sell and build a new house on a couple of the lots we have behind us here. A big open floor plan with one big bedroom and a smaller one would be be great for us.

[Blue_In_AK]

7. I'm not anticipating much decline in my home's value...

I bought a foreclosed HUD house (or duplex, actually) back in 1990 for a quite reasonable price (we were at the end of a real estate crash here) and in the intervening years it has more than doubled in value. Even if the value declines significantly, I will still be far ahead. The irony is that I was forced to buy because my landlady at the time got foreclosed on. Having that eviction notice tacked to my door was one of the best things that ever happened to me.

Lemons/lemonade.