No Rise in Home Prices until 2020?

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Do you agree that home prices won't rise until 2020?


  • Total voters
    11

under--H2O

LoanSafe Member
Sep 29, 2011
7
0
0
From CNBC...

News Headlines

"Home prices are unlikely to recover before 2020 and mortgage defaults will persist for years, says a survey of bank risk managers out Friday."

Wow. :weird:
 

thomaspaine

LoanSafe Member
Jul 4, 2011
180
0
0
WA
In my opinion that is optimistic. These are rough numbers but If the value has fallen 40% from the peak and started appreciating at 3.5% per year in 2012 it would be 2028. If appreciation were a more realistic 2.5% - it will be 2034. It would take a housing boom of 7% appreciation every year between now and 2020 to get back to that peak level. Those numbers only return the value - they would not include any associated costs of maintenance or Realtor fees to sell.

With over 2 Million fore closures in the pipeline, up to another 10 Million foreclosures expected, decreasing real wages, baby boomers needing to down size (or even vacate due to health reasons), Echo Boomers unable to afford college debt - and cannot even think about purchasing a home, and a huge overhang of homes on the market - home prices being back at the 2006/2007 peak level by 2020 is about as real as Santa Clause.
 

knownick

LoanSafe Member
Apr 16, 2009
704
9
0
The wording of that article is deceptive. They say most don't believe that home prices will "rise above 2007 prices before 2020".

I completely agree. I actually can't imagine a scenario where prices go back that high in the next 8 years.

Which is not to say home prices won't rise until 2020. I think within the next 2-3 years we'll start to see sanity return to the housing market and go back to incremental value gains in the 2-3% annual range, consistent with what the housing market has done long-term.

Frankly I think the very LAST thing that needs to happen is for prices to rise back to 2007 levels before 2020.
 

jakelabry

LoanSafe Member
Jun 4, 2009
1,236
5
38
Excellent point! A return to historical incremental gains and conservative, traditional lending practices is the only rational way out of this mess. Of course that presupposes the government can keep their bloody hands out of it.
 

Pejutah

LoanSafe Member
Sep 18, 2011
322
5
18
Bay Area, California
....and do you all suppose?

In addition to the inability (thank god) of the market to recover to boom prices any time soon, I've been thinking about lending practices as well.
Do you all think that lending practices of banks will shift given that there will indeed be a housing surplus (if my own neighborhood is any indication---five houses on my side of the block alone have sat empty without 'for sale' signs for over a year now) and millions who've been slammed by foreclosures needing to secure another long term loan?
As I understand it, it can be seven years or so before I'd qualify again--even if I had the $$ for a downpayment...and my credit had recovered.
Do you think there will have to be a shift of some sort on the part of big bank land?