Oak Creek Homes Selling Fast - What was peak pricing?

[a911driver_IHB]

I don't necessarily agree with that in its entirety. However, good schools always demand a premium.

 

[stepping_up_IHB]

The inflation adjusted graphs show the median prices houses should be at the 2002 price levels. Anything above that was bubble. Anything below that from this fall on will be an over correction. ...That is unless some stupid politician steps in and f-s up the situation by rescuing stupid people who knew damn well the price was too high.

I wouldn't be at all surprised if government stepped in further. I'm also curious which banks are considered too big to fail. And lastly, I'm curious about these new companies cropping up that are buying loan packages at a discount with the intent of restructuring them. The ex countrwider who is close to closing the first round and will buy loans up to 100% LTV. I know we have way too many people who owe far more than their home is worth, but some people did put money down, especially move up buyers.

 

[freedomCM_IHB]

The inflation adjusted graphs show the median prices houses should be at the 2002 price levels. Anything above that was bubble. Anything below that from this fall on will be an over correction. ...That is unless some stupid politician steps in and f-s up the situation by rescuing stupid people who knew damn well the price was too high.

I wouldn't be at all surprised if government stepped in further. I'm also curious which banks are considered too big to fail. And lastly, I'm curious about these new companies cropping up that are buying loan packages at a discount with the intent of restructuring them. The ex countrwider who is close to closing the first round and will buy loans up to 100% LTV. I know we have way too many people who owe far more than their home is worth, but some people did put money down, especially move up buyers.

First, the whole "inflation adjusted" price is dependent on continued wage growth. There has been ZERO wage growth for the bottom 90% in the past ten years. so other than the top 10% of houses, I would expect things to be forced to fall back to 1998-2000 levels, which are supported by wage levels.

Second, there will be no "move up buyers" who bought for the past 8 years. They either screwed themselves with HELOCs, or are in the process of losing their appreciation due to the decline in prices.

I'm with Vas

 

[no_vaseline_IHB]

2000 prices were over heated, or so the conventional wisdom went back then.

In the year 2000, the CS index ranged between 100-110, approximately at the same price level they were 10 years prior in 1990... The 90's RE recession overshot to the downside, so the couple of year run-up between mid '97 to 2000 was correcting that imbalance, not a sign of an over appreciated market.

You might have a point. Certainly by 2001 they were overpriced, and after that it was "to the moon Alice" time.

IMO, the '90s RE recession wasn't an overshoot. It settled at fair value, and then headed back up fueled by looser than prudent lending.