That's a ridiculous stat. First off I don't even know if it's true. 89-92 saw prices in L.A. fall by 40%. If you know of any homes in Sherman Oaks, Encino or the Palisades that have fallen by even 15% then please let me know. It's the same story in South Florida. Are prices here down 15-20% from the 2005 highs? In some neighborhoods absolutely. In other areas stuff is STILL making all time highs. Take Naples Florida for an example. In the mid 90's a home there would have cost $200k. By 2005 the same home would've cost a million. Today it's perhaps 850K. Not exactly a free fall.
I just pulled this randomly. First house I clicked. Now tell me Encino is weak. Look at the prior sales. Granted the home is unsold but it sure looks to me like the seller has "wiggle" room. http://www.trulia.com/property/141194-4405-Alonzo-Ave-Encino-CA#sold_data P.S. Wasn't May of 2005 supposedly the top?
I think what is bad is that home prices have nowhere to go but down. "Bad" doesn't mean prices have hit rock bottom now, at the present. "Bad" means that the runup was created by a flood of credit that will never happen a) in our lifetime, and b) specifically to mortgages again. Anyone who has equity in their homes *and has any intention of turning the home for a profit* needs to unload ahead of the market. But most definitely adjusted for inflation and in many cases not, homes will continue to fall in value for a considerable time period. Why? because our financial system is painfully grinding it's way back to a paradigm of sustainable credit. For this to happen over time, the first thing that had to occur is for the economy to get off of credit cold turkey. We're experiencing "the shakes" right now, but as the withdrawal symptoms alleviate over time and homes deflate to proper levels, we'll get healthy again. RT
This is place in Sherman Oaks next to the park I go to play tennis. Originally it was offered for $440K today it is offered for $289K. Price is being dropped at a rate of 10K per week. http://www.realtor.com/search/listi...b2baa8c&lid=1091363483&lsn=1&srcnt=181#Detail I think there are 5 or 6 more foreclosures in the same building. Edit: about 35% drop Zillow estimate $403,500
Inflation is not the problem: the weak dollar is. Blame globalization. The weakness in the USD because of the FX manipulation is causing the high commodity prices. Gold hasn't increased much in real value, just it's valuation in USD. This has caused people with way too much emotion in their trading to push the price to where it is. Regards,
I'm renting a place in Sherman Oaks, a house the owners purchased in '06 for $1m with the idea of doing a rehab. They're trying to sell it, right now, for $750k. No bids. [edit: just found out they've pulled it off the market, thinking things will look better in the spring...]