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Record 19% year over year drop in single-home values

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StageLeft

No Lifer
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Prices of U.S. single-family homes in January plunged a record 19.0 percent from a year earlier, indicative of a housing market that is still in the throes of a deep recession, according to the Standard & Poor's/Case-Shiller Home Price Indices.

Home For Sale - Reduced Priced

The composite index of 20 metropolitan areas fell 2.8 percent in January from December
2.8% in a single month is quite crazy-talk.

How far are we from where we ought to be based on historical trends and the normally cemented relationship between home values and incomes that have held over decades? Surely we're pretty darn close.
 

retrospooty

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Apr 3, 2002
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How is that crazy? The housing prices were all going up at rediculous rates for the past 10 years, they had to correct. For them to tank is normal, especially during a recession, especially during a recession caused my mortgage meltdown.
 

StageLeft

No Lifer
Sep 29, 2000
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Originally posted by: retrospooty
How is that crazy? The housing prices were all going up at rediculous rates for the past 10 years, they had to correct. For them to tank is normal, especially during a recession, especially during a recession caused my mortgage meltdown.
The whole thing is "crazy" !

 

retrospooty

Platinum Member
Apr 3, 2002
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Originally posted by: Skoorb
Originally posted by: retrospooty
How is that crazy? The housing prices were all going up at rediculous rates for the past 10 years, they had to correct. For them to tank is normal, especially during a recession, especially during a recession caused my mortgage meltdown.
The whole thing is "crazy" !
The whole ecomomy - yes, but the fact that housing prices dropped so fast isnt. That is to be expected.

A - prices grew too fast for a long time
B- recession
C- Mortgage crisis (loans aren't going out, so people cant buy thus prices drop)
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
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Oct 30, 2000
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Originally posted by: Skoorb

...

How far are we from where we ought to be based on historical trends and the normally cemented relationship between home values and incomes that have held over decades? Surely we're pretty darn close.
The old rule of thumb for you youngsters was 3X your salary for a home

 

BoberFett

Lifer
Oct 9, 1999
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Originally posted by: Common Courtesy
Originally posted by: Skoorb

...

How far are we from where we ought to be based on historical trends and the normally cemented relationship between home values and incomes that have held over decades? Surely we're pretty darn close.
The old rule of thumb for you youngsters was 3X your salary for a home
Depending on interest rates, that rule of thumb was plucked straight from someone's ass, right along with the amount to spend on an engagement ring.
 

dullard

Elite Member
May 21, 2001
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Originally posted by: BoberFett
Depending on interest rates, that rule of thumb was plucked straight from someone's ass, right along with the amount to spend on an engagement ring.
It was plucked out of thin air. But, it is a damn good rule anyways. Just about anyone who follows that rule can fully afford the house, furnish the house, maintain the house, AND have enough money leftover to enjoy life. Just about anyone who didn't follow that rule is having a very difficult time.

Unless you are an obvious exception (such as you have a pile of money sitting around) it is a damn good rule-of-thumb to consider. But remember, no rule-of-thumb is ever 100% accurate.
 

BoberFett

Lifer
Oct 9, 1999
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Originally posted by: dullard
Originally posted by: BoberFett
Depending on interest rates, that rule of thumb was plucked straight from someone's ass, right along with the amount to spend on an engagement ring.
It was plucked out of thin air. But, it is a damn good rule anyways. Just about anyone who follows that rule can fully afford the house, furnish the house, maintain the house, AND have enough money leftover to enjoy life. Just about anyone who didn't follow that rule is having a very difficult time.

Unless you are an obvious exception (such as you have a pile of money sitting around) it is a damn good rule-of-thumb to consider. But remember, no rule-of-thumb is ever 100% accurate.
Actually I was thinking that rule is too much, it seems you're supposing the opposite. Right now with historically low interest rates, 3x might be OK. During normal times 2x-2.5x might be more in line.
 

dullard

Elite Member
May 21, 2001
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Originally posted by: BoberFett
Actually I was thinking that rule is too much, it seems you're supposing the opposite. Right now with historically low interest rates, 3x might be OK. During normal times 2x-2.5x might be more in line.
Ah. I thought you were one of the ATOT drones who kept saying 4x or 5x should be just fine. Of course, they were saying that back in ~2006/2007. I wonder if they've changed their tunes yet.

I bought my house at 2.87x my income. I'm living quite comfortably and have enough spare cash. Since then I've gotten a few minor raises and it now is 2.32x my income.

No one says you should spend 3x. But it is more of a rule that you should really think hard before exceeding 3x. You are perfectly welcome to buy less than that. Same with engagement rings. The numbers given are a maximum, not a minimum. Actually engagement rings are worse since they are guaranteed to lose value and don't replace apartment rent that you'd be paying anyways (unless dating is a rental expense in your eyes).
 

Gothgar

Lifer
Sep 1, 2004
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Originally posted by: BoberFett
Originally posted by: Common Courtesy
Originally posted by: Skoorb

...

How far are we from where we ought to be based on historical trends and the normally cemented relationship between home values and incomes that have held over decades? Surely we're pretty darn close.
The old rule of thumb for you youngsters was 3X your salary for a home
Depending on interest rates, that rule of thumb was plucked straight from someone's ass, right along with the amount to spend on an engagement ring.
plucked out of an ass... sounds intriguing
 
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