I don’t understand your point about “keeping housing prices high”.
Las Vegas is down 65% from peak. A home priced at $200,000 today was worth $600,000 during the peak of the housing boom.
Miami is down 51%.
San Francisco is down 41%.
Los Angeles is down 41%.
Portland Oregon is down 29%.
San Diego is down 40%.
Seattle is down 32%.
Tampa Bay is down 47%.
Who is keeping housing prices high? Where? I think your information is a little bit out of date. Housing prices are down to 2001/02 levels as if the housing boom never happened.
“I don’t understand your point about ‘keeping housing prices high’.”
http://dailycapitalist.com/2011/06/01/home-prices-vs-gold-vs-inflation/
That’s the median housing prices adjusted for inflation.
Currently the workforce levels (trough) are at 1983, housing is still about 10 percent overpriced (across the board), and moreso in most jurisdictions.
And that’s not taking into account the fact that corrections tend to overcorrect.
Deflation is just killing the housing market and this thread is evidence as to why. The young people who are supposed to be the market for new houses aren’d buying because they simply aren’t getting jobs that pay enough or give them enough security to want to purchase a home.
Until that changes - housing prices are going to be in frefall until the median is 3x the median income in the US.
Current median housing value is about 165k, and median income in the US is about 51k. So we’d expect that the median housing prices would drop to about 150k or thereabouts.
That would be the correction that has been overdue for some time. However, there are other factors at hand which suggest a permanent decrease in US demand for housing. That is what this article is touching. If housing demand drops, then yes, you’ll see the prices drop even further.
I wouldn’t even touch a house more than 100k right now.