Mark Gillispie of the PD did a chicken little piece today and so far there are 31 comments all gloom and doom about Cleveland. It’s getting old no? I know I’m tired of it. He queries in his blog post title, Has Housing Market Hit Rock Bottom? Well you could have bought a home a month ago that was listed for $1.00. So I ask you, what does this story accomplish? Not much. But perception is everything. When I read the article earlier there was a poll on the PD site asking if readers think the market has hit rock bottom. At that time 66% of the voters (have no idea how many voted) said no, we have not. 25.5% said yes we have hit rock bottom. The rest are unsure. I would update this but alas I can’t find the poll anymore, maybe the percentages started to get to high on the ‘yes we have’ side. Sorry but this story misses the point.
If you have to sell your house and you haven’t lived in it for more than one or two years, in all probability you will not make your money back. In fact you might have to bring some money to the table. Yes, prices have fallen. But it’s also true that historically, you could expect to have made some equity in your house after you have owned it for five years. That part has not changed. So it’s not really news.
Anyway, I thank Leanne Paynter, a Realtor® friend in Florida for pointing out this article in Realtor.org. There was a study (because we devour lists I think) on the metropolitan areas that are the highest risk and the ones that carry the least risk for home purchases. After reading the Pee Dee article you might think we were on the high risk list. Nope. We come in second as a market that carries less than 1% of a risk for home prices declining further. Here is the list (and btw, no one has a crystal ball, but I was one of the 25.5%). of the markets considered the least risky:
The study was done by PMI Mortgage Insurance Co, they do a risk index every summer. The areas that are the highest risk are the ones that felt that housing bubble that we did not experience here. Remember when your parents told you ‘all things good in moderation?’ I think it applies to housing market growth. We had moderately higher appreciation on home values while some places saw 150% appreciation. In those cases, ‘what goes up, must come down’ applies better I think! Anyway, you can read the entire study from PMI on housing risk here. Peace Out – 3C
6 responses so far ↓
1 kristal kraft // Jul 6, 2008 at 6:09 pm
I’m with you Carole, listening to these chickens squawk the same old tune gets tiresome. They need to quote some relevant facts and stop with the doom.
2 kristal kraft // Jul 6, 2008 at 6:10 pm
p.s. Glad to see Denver is on that list!
3 Carole Cohen // Jul 6, 2008 at 6:15 pm
Kristal yes I’m thinking a rotisserie is a good place for the squawking
Denver is pretty close to the top for no risk as well!
4 Elaine Reese // Jul 6, 2008 at 10:00 pm
I did a post on this Realtor.org info when it first came out. My postion was that IF there is a 1% chance that prices will further decline (as it was for Columbus), does that mean that there is a 99% chance that THEY WON’T!
The media prefers to report the negative, not the positive.
Elaine Reese’s last blog post..Growing a vegetable garden ? the surburban way.
5 TimFerris // Jul 8, 2008 at 2:13 am
Please remember that, from a buyer’s point of view, nobody is going to offer too much, or at least not too often. The market tells you about itself daily, and prognostication and speculation are largely useless activities. Talk is cheap. Doing, buying, selling are what count.
You can report what happened yesterday, but you can’t really predict what the trend will be next month. We’ve never been here before. All the rules are in flux.
TimFerris’s last blog post..the giddy ascent to happiness
6 Carole Cohen // Jul 8, 2008 at 4:46 pm
I agree completely Tim. I just get so tired of the negativity. I’m still saying they can’t go lower than a dollar though lol
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