Does The Mid-West Have A Housing Bubble?
Some readers want to discuss lesser known bubble areas of the US. “I am interested in a thread on ‘non-bubble’ areas, like North Carolina, Georgia, the midwest, etc. We all know that California, New York, Boston, Florida and DC are in for a world of hurt, but what about the non-bubble areas?”
Another added, “The midwest is in an unaffordable housing crisis with the same mania as the west and east coasts. It is just that the dollar amounts to purchase a house or condo are not as high as on the coasts. The same false wealth is going to result in foreclosed houses.”
And another, “I have been wondering about the midwest . I have been feeling all along that the fever/boom took the Nation.”
One had an example, “My brother lives in a suburb just north of Indianapolis, IN. He bought his brand new 2400 SF+ home about 5 years for about $120k. The homebuilder bent over backwards to get people from this largely blue collar area into their homes and now many have been foreclosed.”
“The homes in his community are now going for roughly $110k and the local housing inventory keeps growing due to continued building and foreclosures. He would be happy just to have any equity in his home.”
The Chicago Tribune has this report today. “The Commerce Department Friday reported that the Midwest was the only region to eke out a year-to-year increase for the month, 1.1 percent, compared to February 2005. Sales fell 27.8 percent in the West year-over-year, 9.6 percent in the South and 13.4 percent in the Northeast.”
“In Chicago sales are holding even or are down slightly from last year. Some builders are turning to buyer incentives, which amount to discounts, to keep sales humming. ‘In certain areas of the suburbs incentives are increasing, so it is keeping inventories in line,’ said Mark Gianopulos. Heavier incentives are in the Yorkville and Plainfield markets because a lot of big builders have inventory coming on line, he said.”
“‘With the slow start this year, some [builders] may have panicked,’ said Phil Walters, vice president of a Libertyville-based division of D.R. Horton. ‘There is a lack of urgency on the part of buyers. They are shopping around,’ said Walters.”
“‘It’s getting difficult to get your arms around who is shopping for new homes right now,” said Mark Malouf, COO for Montalbano Homes in Oak Brook. ‘The environment in Chicago has gotten very competitive in terms of incentives.’”
“His company also operates in Arizona, part of the Western region, where February new-home sales took a dramatic dive. He said speculators became a big part of the market in Phoenix, and, when builders realized the extent of their investor influence, many made an effort to limit their purchases.”
“However, ‘it was closing the door after the horses had left the barn.’ Malouf said. Activity by speculators drove prices so high ‘that we left the true buyers, the owner/occupant who wanted to live in the homes, on the sidelines,’ he said.”
“‘We are trying to understand what it will take to get buyers back into the market,’ Malouf said.”
“‘We are trying to understand what it will take to get buyers back into the market,’ Malouf said.”
When the cost of owning a home = renting!
PRICE can be an issue if you are trying to sell a home, but can’t.
Housing bear: The cost of renting = housing cost - tax benefits (+.-)(adjusted for in/de-crease in property values) ….would be a break even price analysis IF we hadn’t over built 2.1 million homes per annual household creations of 1.3 million in the last 3 yrs. Therefore with 3 yrs. of excess supply driven by speculations..this formula needs to be adjusted to After all the speculators have been foreclosed upon and the banks OREO problem exceeds thier quarlerly writeoff and income! OR in about 6 years (2100-1300=700).Where 700 annual excess production for 3 years = 2.1 million homes. Therefore when new housing suppply build is less than 1.3 homes (the amount of parity to household formations), the excess supply can begin to be unwound. ‘”Until then supply continues to exceed utility.” Using our ECON 101 text; What then is your expectation for PRICE? up or down?
And then until when……..hint where S and D intersect..This of course would be mere theory and doesn’t work in the Gold-i-locks Fable myth we live today!.
Umm I think more than 1 million illegal immigrants enter the US each year. Not to mention legal immigrants and the domestic birth rate. We create more than 1.3 million new households per year. Did you catch the immigration rallies on the news? Lots of illegals featured who take on mortgages, pay taxes, insurance, etc., who are not counted in official statistics.
I was amazed with the Arizona response. I didn’t realize that there were so many mexicans there.
But the 1 million illegals live many to the housing unit, and the 1.3 million new households would absorb only 900,000 units even if their home ownership rate were going immediately to the current near-70% average. Though the household formation rate has been fairly constant for many years, the rate of home construction even at the slower pace of the ’90s was raising the ownership rate 0.5 percentage points a year. That means that even that slower pace was about 400,000 units above absorbtion due to household formation, so there’s no reason at all to believe new households are going to soak up the glut that’s been built. And if the reason the ownership rate rose 5 percentage points was that loose lending was putting people into homes they really can’t afford, it’s entirely possible the rate will drop 5 percentage points back to its historical average, dumping about 4 million more homes onto the market.
I agree, but i also think there is a chance that when the easy credit disappears, there will be more than just a drop back to the historical norm for price and ownership rate.
it’s a very general problem because we are seeing the same in Europe: many of the latest homebuyers are people who could never have afforded a home without the current loose lending, century-low interest rates thanks to the central banks, huge state subsidies for all kinds of ‘disadvantaged’ groups etc.
Heard this morning 11 million illegals total in the country. Those are government stats.
Good thing for illegal immigrant homebuyers that we are in the no-doc lending era…
Illegal immigrants do not pay income taxes or property taxes. All studies show they consume far more public resources than they contribute.
A country is not a piece of paper like a constitution. A country is the people who live in it. Import millions of Mexicans and guess what you have, …Mexico.
If I wanted to live in Mexico, I would move there.
It simple Econ 101. Lower the price. That’s it to it.
Here in Colorado Springs, hope springs eternal among the permabulls. Local realtors have actually claimed in their ads that “there is no bubble here” and made some highly dubious claims that investors are flocking to snap up local bargains.
While the median home price locally is up 9% over Feb 05, a realtor I know told me the number of homes on the market is up 12% over this time last year. From monitoring the El Paso county web site it seems like the rate of foreclosures is going up parabolically. Not surprising, considering the prevalance (about 50%) of I/O and other creative-financing schemes to get future FBs into homes they won’t be able to afford as interest rates rise inexorably. You can also smell the fear/desperation at open houses, even among the more established, high-end realtors.
Looks like I’ll be renting for another year.
Another added, “The midwest is in an unaffordable housing crisis with the same mania as the west and east coasts. It is just that the dollar amounts to purchase a house or condo are not as high as on the coasts. The same false wealth is going to result in foreclosed houses.”
PRECISELY. Same thing in TX. It is NOT cheap here no matter how many self interested individuals try to sell you something by saying it is. It’s as ludicrous here as any bubble area.
I saw this summer speculation in Nebraska! Nebraska! My husband’s home state. There are some of the finest most rational and down to earth people on the planet living there but my God, talk about a place you wouldn’t want to live except as a possible alternative to life in prison . . .
talking about TX: on the big Dutch websites dealing with investment etc. there are plenty of ads from project developers in TX who promise 26% yoy (or similar) return on investment …
Texas developers are famous for promising big returns and instead returning big losses. The good news is, they usually lose all the money they stole plus their own and end up bankrupt.
What did you see in NE? I was raised in Omaha, and my parents still have a home there.
I checked RealtyTrac.com, and there are as many pre-foreclosures, foreclosures, and bank owned in Omaha as in San Diego (153 vs. 165). The “stretch into the home” factor and cash out refis took the whole nation by storm.
Detroit is in the midwest, as are many GM-dependent economies. Could 100K fewer blue-collar GM workers possibly have some impact on the midwest housing market?
not all housing tanks had their start in “bubbles.” Detroit ain’t a bubble - it’s not full of speculators buying because they think the price is going up. But it is cruisin’ for a bruisin’ - the fundamentals call for a serious drop in price here, but not from a bubble. Lots of places, Detroit, Columbus, Indianapolis, Charlotte, haven’t seen a bubble (except for tiny bubbles - downtwon Charlotte condo market, maybe), but some, like Detroit, can still have a big fall, and others, like Columbus or Indianapolis, may be set for lots of foreclosures based on loose lending and no appreciation, but not (necessarily) based on lots of depreciation. For these places, depriciation is more likely to be an effect of the foreclosures than a cause.
Mecklenburg County (Charlotte) has been seeing 7000+ foreclosures a year since 2004. We’ve already been squeezing out a lot of the crummy lending. I do think housing has a fairly firm pricing floor because of this.
well, I think you can have “bubbly” activity even without speculators galore just based on expectations of appreciation. Sure, Detroit may not be loaded down with speculators, but people have been willing to pay prices they realized were too high based on any ‘fundamentals’ because they believed in a 10-15% y-o-y appreciation rate that was being touted as the national reality. The whole country has experienced this I think. It’s still a ‘bubble’ if people can’t afford the homes and buy them anyway because they believe it’s stupid not to take advantage of the appreciation they’re told by the press and the realtors is a “no-brainer”.
In places like Ann Arbor there has additionally been speculation too, and maybe elsewhere in little local games of monopoly, rather than the glamor of investors being courted on the internet for condotels in San Diego. Wow, look at rates, look at appreciation…there’s always the need for people to move here (in Ann Arbor, for school…) and you can always rent it…just buy those houses for sale next door. A local realtor told me something like “he can’t tell me how many people just went and bought the place next door, thinking they’ll sit on it and rent it for a while, then sell it for big profit”. He actually seemed rather shocked though when I told him that at least nation-wide the numbers indicate that in recent years between 25 and 40% of home purchases weren’t primary residences…so, there’s the “bubbly” activity from people believing that they too should own multiple properties as part of their ‘investment’ portfolios. Buying, it has been decided, is the *only* smart thing to do, and this has been the mindset for a good 5 years I think. Lax lending standards, stagnant wages, prices driven by a belief that it’s only up up up from here…it’s just a question of bubble-degree from place to place….
cheers!
good point, just look at Europe: you have to look very well to find the speculators, except for some bubble areas like London in the UK. But at the same time in some of these markets (UK, Netherlands, Spain, Ireland etc.) the gains over the last 10 years are much bigger than in most of the US ‘bubble markets’.
I live in a small city in a lower-income area of the Netherlands. Hardly anyone talks about a housing bubble here but at the same time, double-digit yearly price increases are considered a fact of life. 15 years ago a ’starter home’ would cost around 30-35K euro, now the same home costs 175-200k euro and nobody thinks that is strange. Maybe 5% of the citizens would be able to buy their own home at current prices using a sound mortgage and prepayment like we had 15 years ago. Many people have purchased second homes in other countries as an ‘investment’ - this is not considered ’speculation’ in Europe because everybody knows it can only go up (has been like that for 10-15 years now).
yeah, husband just got back from visit with brother in kenya, where he met some kid-less fellow aid worker couple who just sold their house in spain because they weren’t using it enough to justify holding onto it. I believe they were a euro couple…don’t know how many other houses they might have, but it didn’t seem like they’re specuvesting type so much as doing what’s considered “the reasonable” thing!
do people just take “normal vacations” anymore? do they only buy vacation homes now? will they start selling floating condotels…you “own” the cruiseship cabin and rent it out to the poor saps who can’t afford to “invest”?
it’s all so nutty…
The effects of bubbles as big as the current one leave no town untouched across the USA. Last time around (early 1990s), when my wife and I had just settled into our first home in the Midwest, we were duly impressed with the large number of California bubble refugees who were buying the largest-sized new homes. Don’t kid yourself — when the dust settles, it will be apparent that many Californians traded their outsized home equity gains for commodious living space in the Midwest. We would have done it too if the opportunity had presented itself.
well I sure hope they’re looking to create second careers in interesting retail or the arts if they come to ann arbor, because it’s feeling kinda dull here lately!
cheers…
Does anyone have any thoughts on a bubble in SW Missouri (a.k.a. Ozarks, especially around Springfield-Joplin)? There are lots of new houses being built everywhere, even in very small towns. Big, fancy, McMansions that look ridiculous next to a 120 year old 1 bd/1 ba tear-down, or behind a turkey farm, or smack-dab up against Interstate 44, or downwind from a large herd of cattle. I do love Carthage though. Fabulous turn-of-the century (and earlier) stone and brick understated homes which seem to be reasonably priced. Oh, by the way, a bunch of the new McMansions were in the path of the recent tornado. Yikes.
You’ll be able to buy things there for pennies on the dollar in a few years. There are liquidators on Ebay right now trying to sell lots in that area.
txchick57 — That’s interesting! Can you point me to some of these listings? I’m renting now after selling my house in Saratoga, CA in Oct ‘05. At some point I want to buy a few acres and build a modern house out of a metal grain bin.
I should have said there were liquidators because the guy is gone now after having been there for months. Put a email search to yourself on Ebay for that and when he comes back, they’ll email you.
The house you want to do sounds cool! I love the use of industrial materials in houses. Zincalume siding, etc. You must be a Dwell Mag reader
Yes, industrial materials. Concrete floors, steel countertops, corrugated metal skins, etc. Actually, the house I just sold and lived in for 15 years was the typical rennovated CA ranch. I loved it when I was there, but now I want something totally different. I don’t really know anything about industrial materials used for housing but here in MO they have a lot of metal industrial buildings (e.g. barns, offices, sheds) and I discovered that’s what I like rather than the multi-stone pretentious McMansions (which I’m not willing to pay for anyway, even in one of the cheapest areas to live in in the US!). So I’ve done a bit of exploring and even found that some of my new friends, right here in small town MO, built with their own hands, and the help of the Amish, the industrial-style house of my dreams. The NYTimes recently had an article about a “A Corrugated House In a Sunburned Land” in Lubbock, TX. And I saw on TV a Kansas farm “house” made out of a metal grain bin. Fantastic stuff. Clean lines, low maintenance, open, goes well with simple inexpensive furniture, and cheap to build. Didn’t know about Dwell Mag but on your recommendation I will order it. Any more thoughts, pointers, etc. greatly appreciated.
It’s a very cool shelter porn mag devoted to modernism and being different. The anthesis of the McMansion.
http://www.dwellmag.com/community/616867.html#
Them hillbillies buying up them specuflipper McMansions in the Ozarks? Might need em for their 15 kids, and one room to add the wooden teeth.
How about the Branson area? I heard a lot of McMansions going up there too.
I gotta say that the biggest first impression I had of Ozarkians was the poor dental hygiene. Not everyone of course, and really a small minority, but I don’t remember ever noticing a Californian, including immigrants from 3rd world countries, with black and/or missing teeth, and not just one or two either.
That’s cool, make fun of people who haven’t had the same advantages and/or education you’ve had.
Well alrighty then . . . we’ll let them do it themselves!
http://www.duggarfamily.com/
txchick57,
If their were a Political Incorrectness Prize, I would nominate you first
GS
You bring to mind one of the two hillbillies with alternative sexual preferences in the movie Deliverance (not in the Ozarks, but the Georgia mountains present a similar milieiu…)
Believe it or not, they are building a bunch of condos in Branson.
Come on. Only 15? This one has it beat!
http://tinyurl.com/anqeo
The Duggars are building a steel house, and are debt-free. I think that’s cool, and the author of that article is a bigot.
Have to agree with you wholeheartedly with this one.
But, that is the BA for you. (no offense to you normal BA people). Ultra-liberal ultra-sensitive, hyper-discriminating, and altogether too self-obsessed.
Ok, so you like your life, get over it. Not everyone wants to be like you. And, if you didn’t get the memo, noone in SoCal really cares about up north except that Sacramento doesn’t know its a** from a hole in the ground. Oh, but we’re not as “cool” as SanFran, huh?
If you are debt-free, have as many kids as you want. They are hardly a burden on society, unlike 40% of the Cali crowd. We ARE the overconsuming, greedy faggots on the left with our gas-hungry SUV’s 100 miles round-trip carrying singles to work, sipping on $5 lattes, and living 2 to a 4-bedroom stucco box on the hill. And you don’t see them bashing us that’s because they’re good people, and would never think of insulting people who don’t believe the same things they do. Shame on us.
Add another in agreement. I have cousins who are members of a very religious group (no TV, pop music, sing Christian songs with the family each night, 6 kids, etc.). Part of their religious beliefs are that one should not borrow money or be a burden on society. They are some of the most productive, honest, faithful, downright-good people I’ve ever met. I’d take a million of those over a dozen drug-addicted, free-loving, child-hating Goths any day. Just MHO.
I have a cousin who lives in SW Missouri, also of the far-right Conservative Christian ilk. Her husband forced her to ostracize her own father (himself a Man of God) because his brand of religion was not sufficiently wacko for hubby. But at least they don’t have fifteen kids with bad teeth:-)
Them tornados things bring a new kirnd of lif every few yarrs.
west virginia -
500,000 people and 50 last names…….
Hey Ben, how about a topic on predictions for 2006? Get everyone to submit 3-5 predictions for this year, and then take a look at them in December. My predictions:
- Long-term interest rates > 7.5%
- Lereah does a public about-face, but points to some ambigous comment he made earlier so he can claim he saw it coming all along
- condoflip.com site taken down
- Legislation introduced in Congress to rein in lending standards, targeting in particular: sub-prime lending, no-doc/low-doc loans, I/O and neg-am loans, and teaser rates.
- Big layoffs at Countrywide, WaMu, and other big mortgage lenders
- At least one national lender hit with a high profile class-action lawsuit by people who claim they were duped into signing bad loans.
“- At least one national lender hit with a high profile class-action lawsuit by people who claim they were duped into signing bad loans.”
It’s already happened with Ameriquest.
So check that one off and it’s five more to go!
I would say in NY, a lot of the rust belt cities you can’t commute from NYC to are not in a bubble.
buffalo
rochester
albany
schenectady
troy
syracuse
however, a lot of the suburbs can be pricey.
It’s hard to fall much from rock bottom. Buffalo rivals Detroit in its decrepitude. Seriously, you can buy inner city SFR’s in Buffalo all day long for $40K. But then who is goign to rent them? What jobs would they hold to pay rent?
Well that’s true in Syracuse too. What would have been well kept beautiful homes in Boston or bubble cities belong to the gangs. On too many streets there are shootings in middle of the day so any investors are dummies from out of town that didn’t do their homework. However, drive outside 20 minutes and you’ve got some very deep pockets. In fact in this town there is an awful lot of old money (and names you’d recognize from social and historical reading)
I should say, they aren’t overpriced as many areas, but even they could see declines.
John Law,
Re us Rust Belt cities: Do you think this is due to overall lack of confidence in the market? My biggest fear is layoffs here when Lockheed Martin, or New Venture Gear (which builds trannies for Detroit) loses a contract. My h works for a different type of national company. For years they’ve been the top of almost every market in the country—untouchable. But layoffs anywhere will have a rolling trickle down effect. It’s a world economy not local. So we might not see the effects for a few more years as it makes its way thru the system. But I still believe we’ll see it here too.
When we shopped here in 1997 (but didn’t buy till 2002) you could pick up four bedrooms for $110s in the toney burbs….now those go for twice as much so we’ve definitely got room to fall.
Comment by Inspired
2006-03-25 14:31:24
Housing bear: The cost of renting = housing cost - tax benefits (+.-)(adjusted for in/de-crease in property values) ….would be a break even price analysis IF we hadn’t over built 2.1 million homes per annual household creations of 1.3 million in the last 3 yrs.
I couldn’t agree with you more! I was being generous in saying that one should consider buying when the cost of owning a home = renting.
Any reports from Raleigh, North Carolina?
Raleigh/Cary is still doing quite well. Lots of northerners have been “discovering” the area. Housing is kinda high by NC standards but quite reasonable to someone from the northeats or California. There is a fairly good public school system there, which is another draw for people fleeing crummy inner city schools elsewhere.
The Releigh area is a real nice part of the country. It’s an area I’m considering . I sold on Long Island last year. Now I’m planning on sitting on my pile of cash for two or three years then moving to an area like North Carolina and buying something with cash. The quality of life sucks in New York. It’s like being a rat on a treadmill, till you die.
Careful around the triangle area…agents I found lie blatantly and there is speculation buying…look at the new development Amberly in Cary…the owners of the 1st phase live……you guessed it! San Diego! Can’t sell them and can’t rent them…they have ruined what could have been a great development IMO If you are planning a move I highly recommend renting and really talking to the locals to get the true story about anything…do not ask the realtors!
So it looks like alot of building took place in many of the States with a expectation of buyers that never showed up . Did all these builders think the BABY BOOMERS were going to be retiring to all these low activity areas or were they thinking at all ? I am beginning to think alot of limited partnership money was funding this excess building .
Virginia Beach and surrounding areas seems pretty bubbleriffic. Prices of housing is very high compared to the salaries paid by the better paying employers. The one issue is the military appears to provide pay for housing based on market value, so that is said to perhaps be one reason for the escalating costs. Also our region seems to have jobs, and perhaps people from other markets are cashing out by moving to this area.
It is an okay area, but not that great. Increasing crime problems with gang activity, murders of the day, lame employment, transent military… Pretty much a forgotten region, however CNN’s recent article has us 30% overvalued.
“‘We are trying to understand what it will take to get buyers back into the market,’ Malouf said.”
Did this guy get dropped on his head when he was a baby?
Omaha here. I wouldn’t exactly call it bubblicious; however, inventory has begun to swell and is up sizeably over 2005. Sales are also decreasing as of late.
As far as I can tell prices have not begun to adjust….yet. My observation is that speculation wasn’t very big here. That is not to say, of course, that there is no speculation here.
What will end up being the killer will be the tightening of lending practices and higher interest rates. I’m principally talking about Lincoln/Omaha here as opposed to the rest of the state. With respect to the rest of the state I would have no expectation of serious downward change, since the rest of the state (and most non-urban areas of great plains states) is in a depression and housing is correspondingly cheap.
One word about the bagging on the middle part of the country. It is not us who have produced the situations such as the California affordability being at 14% (or whatever it is, if it is even that high).
I find it rather remarkable that people on this blog would hold the view that we are somehow idiots when it is the people on the coasts who are paying near or over half a billion beans for a middle-of-the-road (read:POS) house. That, in and of itself, is the very definition of stupid. This is not to mention the fact that the coasts generally have horrible schools, traffic, crime, stress, you name it.
It amazes me that people don’t realize that someone on the coasts with a lot of equity in their home could buy one in this area for cash and still have a sizable stockpile left over. As long as they live in a sizable city, then employment is not a problem.
If Warren Buffet’s house is assessed at about 600k or so, that should say something. 600K buys one heck of a nice house in these parts.
For those on the coasts who don’t know where Omaha and Lincoln are, they are in Nebraska. Nebraska is between Chicago and Los Angeles somewhere.
I know what you are talking about. However, people are willing to pay an excessive price to live where there are interesting people, places. careers (not just mind numbing jobs), weather and things to do. We need people in the midwest so thank you for staying.
John Law-
Don’t you think Troy, NY is in a little bubble? I was there last year and it just felt like: “Oh boy, if it’s happening here, it’s got to end soon everywhere.”
I don’t know, prices fall and rise everywhere.
if you look at housing charts, most cities have taken off since 2000.
Topeka, KS, no bubble here, however, a number of expensive homes for sale that east/west coast people have bought and can’t resell, 400K, 500K, and up. One new house lowered to 899K, never lived in, been for sale for over 5 years, house would be 20 million on west coast.
I can report on what’s going on in Northwest Georgia (Cattoosa/Walker Counties). I talk to the builder of my home every once in a while and I talk to a local developer periodically as well. According to my builder, things are slow right now. He has 5 homes on the market and none are selling. One that he has on the market is in a subdivision where there are 30 homes already built and not a single one has sold in 6 months! The banks are refusing to finance any new building in this subdivision until some of the existing inventory get’s sold. These aren’t high-end homes they’re in the $160,000-$230,000 range.
In my subdivision which has 17 homes built and 13 lots still available the developer/builder has started construction on 4 new homes here. These are all high-end homes with prices ranging from the low $300,000-$679,000 (yes $300,000 is expensive in these parts of the woods). Ironically, last fall, the developer/builder was going to stop building up here because he had 3 homes that hadn’t moved in months and the carrying costs were killing him. He leased-to-own one home and then in December all 4 of the remaining homes sold within a couple of weeks of each other. Based on traffic here in this subdivision, I’d say that interest in buying homes is still pretty high, we’ve got a steady stream of traffic looking at available lots for sale.
Building is on a holy terror . Subdivisions going up everywhere. But, builders are now starting to offer incentives such as gift cards. New construction is having a tough time selling directly to the buyer so builders are listing more and more with local realtors for additional exposure.
The local banks think that this is going to be a good year here in my neck of the woods and are expecting home sales to increase 10%. That’s just homes sold, not appreciation. I don’t have a clue what they’re expections for that are.
As you can see, there is conflicting data.
The good news here in Northwest Georgia is that appreciation has been far more reasonable than in many areas of the country. It has run about 6% for the past 3-4 years on new construction. However, while talking with a local developer, he received a call from a guy out of California who represented some California investors who was coming into the market to buy some properties! If investors start targeting Northwest Georgia and property appreciation begins to increase substantially well all I can say is…… MY HOUSE IS FOR SALE! Though I bought this home to retire in, I know that I won’t be able to pass up an opportunity to make a good profit.
Personally I’m of the mind that things will flatten out and we’ll see depreciation over a period of time of 7-10%.