California home prices dive 38%

AP ^ | 19 Dec 2008 | AP

[BGHater]

The median price drops to $258,000 in November from $414,000 a year earlier as foreclosures prop up sales but erode prices.

The median home price in California dived 38% in November from a year earlier as foreclosures propped up sales but eroded prices, a real estate tracking firm said Thursday.

[MrB]

Don’t paint with too broad of a brush there.

Rehabbers would probably be called “flippers” because they don’t hold the property long, but they sure and take some dumps and turn them into nice domiciles for folks who need a house.

[Publius6961]

Rehabbers would probably be called “flippers” because they don’t hold the property long, but they sure and take some dumps and turn them into nice domiciles for folks who need a house.

You're right, of course, but in the last 5 to 10 years, that hasn't helped most buyers who both need a house and can afford it.
The snowball effect of real estate fees and increased tax assesment is a fatal flaw in that argument. The get rich quick folk artificially increase the price of all available housing. Else how do you explain the outrageous prices of falling apart non-rehabs?

[MrB]

I’d say most of it was supply and demand.

When the demand was “normal”, ie, not propped up by people who have no business getting a home loan chasing properties,

you didn’t see the outrageous “appreciation” of property values.

[Zhang Fei]

There is almost no more place to build in NYC. This constrains supplies, which helps keep home prices high.

That only works if people have jobs to go to. Once the jobs go out the window, people double up - take on roommates or move in with family and friends. Or they move out of the city. Hong Kong also has a huge supply constraint. Its real estate is down 40% vs 10 years ago.

[edge10]

Yep, from 2000-2003 we saw our house appreciate 58%. The following couple of years (we sold and left the state in 2003) it continued to skyrocket.

Reality is reentering the price scene. There was no way a middle class family could afford to buy a house there, without using one of the stoopid mortgage schemes like interest only.

[Freedom_Is_Not_Free]

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.

[jamndad5]

I bought in February of this year. In 2007 the new home My wife an I fell in love with was $307,000.00. I’m glad we waited. We pulled the trigger at $261,000.00. We knew the value would diminish some, but I’m still very comfortable with our purchase. I’ll probably see my final days in this house. Ah, yes, Bakersfield, Ca.