The price range above means nothing as all up to $250 is afr far too broad.

Like your poll asks for it...
$200,000-$249,999
$150,000-$199,999
$100,000-$149,999
$50,000-$99,999
Less than $50,000

Sorry, MrRational -- that's how I analyzed it for Sunday's story, so I'm just sharing what I've got. The $250 mark is a pretty common divider between the first-time and move-up market. That's why I broke it down that way when I was trying to understand what was what.

I am unsure if you guys all realize this or not - the home sales are happening in the price ranges where banks are giving loans out. MOST to ALL people these days do not have any real cash or savings to speak of. All of their perceived "wealth" is tied up in their home in the form of "equity". Banks, for the most part, are only giving out loans for under $250,000 (unless you have the income to support for more and less face it - Baltimore does not have many jobs that offer a household the ability to pay for mortgages more than $500,000). Most people who do have the ability to pay more than $500,000 already have a home. Going forward - new buyers of homes (mostly first timers) have no money for down payments - they are taking out FHA loans and mostly in the $250,000 range. That is where the majority of homes will sell. This will benefit people who bought places in the $150,000-$200,000 range a few years ago and want to move up but at some point all Baltimore area prices will come down SIGNIFICANTLY from present levels. Be very sure buying a house is what you really want to do with your life before purchasing.

A comment to your article on February home sales prompts me to ask: are foreclosures excluded from the MRIS statistics?

Hi John -- I rarely get a chance to look at the comments on stories (as opposed to the comments here), so thanks for bringing it to my attention.

Foreclosure auctions aren't included in MRIS numbers. But many -- most? -- lenders do work with real estate agents to sell the homes they've already foreclosed on, and all those show up on the multiple list. So no, foreclosures are not excluded from MRIS statistics.

John all you have to do is go to ANY Circuit Court House and you will see just how many auctions there are on foreclosures. I have been to a few this year just to see what the reserves are. About 90% of the time, the bank is represented by a law firm who initiates the foreclosure proceedings. They attend the auction and set the reserve price for the principal balance plus arrears and other fees. What ends up happening is that the bank buys the property back and then they try to sell it on their own as an REO. Because there are so many foreclosures, homeowners often stay in their home for months after the foreclosure sale. The bank will then set their price on the open market with an agent, who usually sets the bar pretty high initially and then drops the price as the home sits on the market. Most of the banks are not in a big rush to sell these homes as they don't want to oversupply the market. Otherwise, prices would continue to fall even further. There are some great deals on REO properties, but to get the best bang for the buck, you normally have to pay in cash with no contingencies.

Frank:

This is a comment that I can agree with you on. I appreciated that you didn't overstate things.

One minor correction: "There are some great deals on REO properties, but to get the best bang for the buck, you normally have to pay in cash with no contingencies." You don't have to pay in cash, you need to offer in cash and show statements. That's what I did. Why empty a 401k when I can borrow for practically nothing and get tax write-offs to boot. (As an aside, mortgage interest becomes important once income reaches a certain point as it is one of the few things that can help prevent AMT.)

There are some great deals out there MD on REO's. Just make sure you have money to fix it up if necessary, and if possible, offer (not finance necessarily) cash. I'm less optimistic about areas heavily populated by investors/demographics that are more sensitive to economic downturn. Those areas might drop further. But stable, old money communities with good schools could make for an incredible buy. But those foreclosure deals are less common and the competition for those areas is more fierce.

Frank:
1. You should examine studies on interest rates/home prices in NZ. They had a similar phenomenon. It was shown that less purchasing power is less important than consumer confidence. The former is not being used today for median income/median income of BUYERS and the latter is abysmally low, so a prediction of de facto lower prices is unproven and only makes sense if you make certain vacuum type assumptions.

Two, historical nominal prices are of little value given unprecedented economic changes across all levels and construction size.

Third, DP is less important than assets which can be collateralized in some cases. Case in point: I and most of my friends didn't put down huge DP's because we didn't want to. Not because we couldn't.

Will we return to 2.5 median income level across the board? Only if you believe that banking will employ risk models for borrowing from yesteryear; only if houses get smaller, and we return to Carter-type marginal tax rates. In my opinion, too much is different to draw parallels.

And besides, house prices in Europe are startling high with a crap economies which smacks against conventional wisdom.

Zillow's "zestimate" is at $1,243,500. Also shows property taxes at $40,460 per year. It does not show the most recent sales price. Just amazes me how some sellers are still hoping to get top dollar for their home.