As an amusing exercise, I have been keeping a spreadsheet tracking the average cost of houses here in our neighborhood. (Hey. I'm a geek. I think doing something like this is interesting. So just consider me weird.)
Every few weeks, I peruse Realtor.com for houses for sale in our area. My spreadsheet has four columns: Asking price, square footage, average price-per-square-foot, and what our house would cost at that average PPSF. Then I take the whole shebang for the week and average it out.
Back in May, our house would have listed for $301,000. Now, according to the averages, it would list for $280,000, off by 7%.
It's still well more than twice as much as we purchased it for back eight years ago.
(I could, if I were truly ambitious and patient, deal with the county's GIS website--which is pretty slick, but also pretty slow--to get actual selling prices. I am not that patient. Besides, the figures typically lag about six months.)
I'm hoping that it doesn't keep sliding, or that the slide doesn't accelerate. OmegaDad has a tantalizing possibility of a position in the national office, doing some stuff that really gets his boat afloat. The position is listed, he's doing the paperwork for it this weekend. It closes in mid-September. Then, the wheels of public service grinding very slowly, it could take up to eight more weeks before he gets interviewed (maybe). Then, if he gets the position (no counting chickens until they're hatched, eh?), we'd be looking at two to four weeks' notice.
So...I'm hoping that the housing prices don't plummet between now and December.
Interest rates are up, housing sales have stalled, national columnists have written that it's officially a bursting bubble. It was bound to happen sooner or later; the pace simply couldn't keep up. Prices in this neck of the woods have been skyrocketing for years--they increased 97% over the past five years, and 30% in 2004-2005 alone.
There are a boatload of folks out there who have used ARMs and creative financing to get into homes that were a bit too much for them in reality; I found a statistic that says that 8% of all home mortgagers pay more than half of their monthly income on mortgages. While the National Mortgage Survey for the first quarter of the year seems to indicate that foreclosure rates actually declined over the previous year (it's very hard to tell for a non-industry person reading it!), doing some googling led me to many articles talking about increasing foreclosure rates all over the place.
Hard landing? Soft landing? I dunno. Nobody knows. But what with rising health costs and interest rates, essentially flat income for middle- and lower-class wage earners over the past few years, and increasing gas prices impacting commutes and heating and retail costs...well, it doesn't look really promising.
To further amuse myself, after publishing this post, I went to Technorati and searched on "housing bubble" (see my tag below). You don't want to know what I found. Let's just say it's depressing. Words like "recession" and "hard landing" crop up with disturbing frequency. Here's a comment:
"I hate to be doom and gloom but as someone who is living in a HYPER housing bubble zone, NYC area, and own several rental properties in other cities, I can confirm from the battle field that it is BAD!
"Many of my new neighbors who moved in at the peak are concerned about refinancing asap, since their creative mortgages are about to be called from their 5 yr no principal periods. They are all honest and decent families who work hard, but over extended themselves on the type of home they can afford. Many of them have traded in their expensive cars for cheaper variety brands already. I notice the parking lot is a lot less full on my weekend Costco visits.
"Home owners are trying to rent out a rooms to make up for the pop in their mortgage payment going up 50-70%.
"Many have started to think about relocating to areas like Raliegh NC or areas where housing is affordable and there are comparable salaries, but they too see homes for sales without any buyers in sight."
Another commenter to the same post said that he's seeing the same things going on in Boston.
Then my mom forwarded me an email which contained this info:
- 32.6% of new mortgages and home-equity loans in 2005 were interest only, up from 0.6% in 2000;
- 43% of first-time home buyers in 2005 put no money down;
- 15.2% of 2005 buyers owe at least 10% more than their home is worth (negative equity);
- 10% of all home owners with mortgages have no equity in their homes (zero equity);
- $2.7 trillion dollars in loans will adjust to higher rates in 2006 and 2007.
Man. I think I'll go back to bed now to get rid of my headache.
Just to round it all off, today's AP story, "High energy prices, falling home prices strain shoppers' wallets".