The median price for an existing, single-family detached home in California sank to $247,590 in February from $418,260 a year earlier, the Los Angeles-based group said in a statement. The U.S. median price fell 16 percent during the same period, the second-biggest drop on record, according to the National Association of Realtors.
This is an example of realty meeting reality.
Median price reflects houses [i]sold[/i] does it not? The advantage of ‘median’ is that it prevents outlier distortion. Consequently I suspect a large portion of the downward shift in median values [of houses sold] reflects a change in the [i]composition[/i] of closings, rather than in the price of individual houses.
In other words, affordable houses are changing hands rather regularly. Much more expensive ones are not. The 950 square foot bungalow has probably not lost all that much ‘value.’
BTW, what’s a house really worth as housing? That’s reasonably easy to calculate: Take what that house would rent for per month and add two zeros. That’s the maximum it’s worth as a place to live. Anything above that number is pure speculation that a bigger fool will come by and pay even more, later.
And the banks are still screaming for bail-outs. Why not – the US govenrment forced a lot of banks old and new to issue great quantities of sub-rate loans. It may be necessary to let some or a great number of these banks enter bankruptcy including the ones who chartered themselves during these past years to allow them to grab this low-interest stuff. I’m also saying give little or no kind of bailout to non-US banks; we have enough trouble of our own to sink or swim!!
Readers may be interested to know that I had a phone call yesterday from Somebody (a recording) who wanted to put “President Obama’s mortgage relief program” into practice by working out a better mortgage for me. (I bought my house just over a year ago.) I hung up before the recording finished. Anybody else with similar experiences? Watch out!
Actually, we are about to re-fi; the rates have dropped so much that we’re going to switch from a 30 to a 15 and still save quite a bit. Of course, it helps that our bank doesn’t sell its mortgages…..
after moving to cali in the late 80’s from dallas, i can say quite assuredly that there has never been affordable housing in the bigger cities of cali. the tiny ratholes were 250k even back then. our rent went from 400$ dallas to 950$ per month LA and that was in the valley 1989.
And here’s another tidbit……something rarely mentioned when we’re talking about housing: Mobilehome park space rents. Here in Los Banos, they average $400 per month, and they’re pretty stable. Are mobile homes part of the answer to affordable housing? Sure……as long as they hold their value. And they’re not your typical 12-wide unit (trailer to some folks) any more. Typically nowadays, they’re [i] manufactured homes;[/i] factory-built room-by-room and assembled on your own lot. Prefabs? Nope! And they’re [i]NICE![/i] BUT, they’re not mobile.
4 Helen, you’re right! What they don’t tell you, if you take the bait, is that they tack on additional lending fees to that reduced mortgage, and you can end up paying the same as before! They tried that several times on me, and I hung up on the woman halfway through her spiel.