Why the Housing Bottom Might Be Here

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I think that there's one factor that people need to include in affordibility numbers to explain the housing market. I will call it implied appreciation/depreciation.
In 2004 a place like mine could be had for minimal downpayment and about $1200/mo. Rent for an equivalent place was maybe $900. However, it was assumed you'd enjoy 4-5K appreciation every year. Take the middle, 4,500/12=375. Subtract that from your mortgage, and you're at 825/mo. So, it makes sense to buy.
I bought last year, my housing costs are 790/mo. PITI + HOA
I'm happy because I coule rent it out, for, 800 - 900. Plus, I get the paydown and tax benifits.
However, there are many that aren't buying because, well, they think prices will go down more. Say, another 8K in the next year. Now, 8,000/12= $666 on top of my 790 take you to $1,456/mo.
In conclusion, once a consensus is reached that we've hit bottom expect a steep recovery. Because, hey, its cheaper to own, drastically cheaper.
How far we go until that happens? Anyone's guess.

Matt of MN 1:56PM February 14, 2011

Home prices may be dropping, but in My market (North Florida Jacksonville / St Augustine) rents are rising to the point that almost 70% of the homes I sell have positive cash flow and some are offering over 15% ROI.
so while home prices are the most affordable in 40 Years, rent as a percentage of income has certainly gone up ! SO if you can not purchase a home for credit reasons , down payment etc then you find yourself having to rent a 3BR condo for $1000 a month that is been offered at $42,900 , with HOA fees and taxes this would cost under 700 a month to own. How if we had credit then we all know this condo would sell for 1000K again.

Mitchell Jamel of FL 9:37AM February 13, 2011

I love my nest and feel very lucky to have found such a great fit. There are so many opportunities for everyone to be as lucky. Don't miss your chance. You're going to kick yourself later.
http://homesandbabies.blogspot.com

Becky of VA 2:16PM February 03, 2011

I couldnt agree more with this article. We are in a great position to buy right now and people are so afraid that they aren't. Its sad, I'm in a home that is upside down and would love to get out and buy twice the house for the same money....at these rates! I can't believe that we (mortgage originators) are not SWAMPED with new buyers!

Kelley Stumph of MO 11:42AM February 03, 2011

As a Realtor, I can't stress enough the importance of a home’s great first impression.

Linda Strasberg, Las Vegas Realtor of NV 11:29AM February 03, 2011

What is the best way to shop for a mortgage refinance? It is a good idea to contact at least three to five lenders for input on mortgage programs and rates. Also search online for "123 Mortgage Refinance" they found me 3.32% refinance rate really fast.

sarno leah of CA 2:01AM February 03, 2011