10 housing markets ready for a fall

[ckramer]

The area poised for the biggest fall in 2007? Stockton, Calif., where prices are expected to drop by 7.1 percent and another 5.3 percent in 2008. If the forecast holds true, a home purchased in Stockton today for $350,000 will be worth a mere $307,917 two years from now. And that doesn't account for the additional toll inflation can take on the true value of your asset.

Next in line to take a turn for the worse: Las Vegas, where our forecasters think prices will sink 6.6 percent next year and another 8.1 percent in 2008.


10 housing markets ready for a fall

Metro area 2007 projected price change 2008 projected price change Median home price

Stockton, Calif. -7.10% -5.30% $427,340
Las Vegas -6.60% -8.10% $314,380
Bakersfield, Calif. -5.50% -6.60% $310,820
Santa Ana - Anaheim -5.50% -4.50% $710,810
Los Angeles - Long Beach -5.40% -4.60% $533,740
Miami - Miami Beach -4.90% -7.50% $371,660
Sarasota - Bradenton, Fla. -4.80% -0.80% $312,720
Oakland -4.60% -2.40% $673,800
Fresno -4.60% -4.30% $353,820
Fort Lauderdale -4.30% -4.30% $366,860

http://money.cnn.com/2006/12/18/magazines/fortune/worstmarkets.fortune/index.htm

[ckramer]

1. How about New York and Boston?

They will fall too?

[halobeam]

7. I'd like to know that too.

My guess is, why wouldn't it.. seems logical. Some in my family say that specific neighborhoods will never really bottom out (in long island, ny) but I've a feeling it's just their guess.. seems they've a lot to lose if they are wrong. My own brother has a mortgage at 350,000... just about makes it with overtime pay. Glad mine is less than half that in the same neighborhood. Value would have to go down about 60% for me to break even if I sold at that point.

[Tempest]

2. WooHoo, we're #3

Realtor offices are closing or cutting staff in Bakersfield. Two of the biggest local developers in the area have gone tits up. National developers are moving out and into Texas where the market hasn't been as affected by the downturn.

Houses in my neighborhood have been on the market for months when a year ago they sold within days. Everyone is dropping their asking prices by tens of thousands each month the house hasn't been sold.

[SoCalDem]

3. And where I live, they keep on building and building and building

:cry:

We bought ours for $82K waaay back in '82, so even in "on paper' the value drops, we'll still make out ok when hubby retires and we downsize.

Our house has a larger lot size than the newer ones, and with the imporvements we have done, we are not all that worried :)

BUT, for the newcomers who hoped to make a fast buck in a few year..well..I wish them luck

[Warpy]

4. Six months ago, they were calling the market here in

central NM, "hot, undervalued, likely to increase in value."

House prices on the weekend real estate shows have declined nearly 20% and the houses are being shown empty, a real change from last year.

They said 2 months ago that the Boston market had recovered and that prices were on the rise again. That one's been shot down, too.

If you're going to buy a modest house as a shelter and hedge against rising rents, then it's a good deal even if your initial equity in the form of an equally modest down payment goes bye bye. 30 year fixed rates are still low enough to provide a hedge. If you think you're going to be able to retire on the continued appreciation of a hard to heat and cool McMansion, forget it.

[maxsolomon]

5. good. this bubble has no relation to reality.

of course, i'm not in one of those markets so its easy for me to say. what's more, i'm shut out of this market because of escalation, so its even easier for me to say.

[Quantess]

6. Interest-Only Mortgages are really dangerous

You're paying only the interest, and after all those payments, you still have zero equity.
There has been a lot of unwise financing going on for poorer-to-average-income people, and we have seen the results in a huge number of foreclosures.