These numbers are a bit old. It will be interesting to see how these numbers change going forward now that the tax credit is out of the equation. I’ve already seen a number of listings drop in price by about 8-10k in the past month.

I really don’t see how house prices have anywhere to go but down more. The jobs situation isn’t improving, people who have jobs aren’t getting raises, talk of taking away the mortgage interest deduction is back on the table in congress, and interest rates have nowhere to go but up – sooner or later.

I’ve had my eye on the market for several months now. A huge number of houses are still listed at or only slightly below 2006 boom-time prices (I’ve verified this by looking up past sales). Those that are priced reasonably for the current market don’t seem to last long and always seem to have some caveat like needing a lot of work, having an unusually sized or shaped lot, being on a busy street, etc. Many of the sellers with the overpriced listings bought near the peak and simply don’t have room to come down by the double digit percentages they’d need to move their property. Unfortunately a lot of those sellers are going to end up selling short or in foreclosure before the tide rises to save them.

The fact that the Baltimore area market didn’t fall off a cliff like others now seems a mixed blessing. It was great we didn’t see the disaster scenarios that played out in Vegas, Orlando and other boom towns, but I almost wonder if falling off a cliff wouldn’t have spared some of those now barely treading water the uncertainty of being stuck in the current limbo. When your house drops 50% in value almost overnight you have no choice but to make peace with the fact that you’ll never find a conventional buyer and you either have to stay put or let it go into foreclosure. When you lose a few percent here and a few percent there every few months over the course of a couple years, as we have around here, the options aren’t as clear.

Fiserv? Never heard of them. Everybody is shouting and opinionating something, wonder why should they be considered as relevant?

Ronnie, you've probably heard of the Case-Shiller index. That's based off Fiserv's data.

According to Housingtracker.net, median asking prices in the Baltimore area and the Washington area peaked in the same month (May 2006) and also bottomed (so far) in the same month (January 2010).

DC area Asking Prices
Peak $490,354
Bottom $286,000
Percentage drop 42%

Baltimore area Asking Prices
Peak $350,557
Bottom (so far) $239,925
Percentage drop 32%

Government trying to control the economy is like trying to herd cats. After a lot of time and effort the result is the same; the cats will do what they want to do. The Government should have left the real estate market alone and it would have corrected itself by now.

Some would have gotten hurt more and some less, but the end result will be the same.

The Maryland region is buffered by the fact that it is a less expensive alternative to DC, not to mention it is one of the high tech areas within the country. BRAC will help a little as well.

For a liberal Democratic state, the state is financially better off than most.

John, thanks for update.

You did not include the "other side of the curve", for example the Baltimore area average home price in 2001 was $175,000.......!!

so IMHO, we still have a way to go

In our estimation, the tax credit pushed sales forward by 3 months. We are estimating that May - July should experience 18-23% less sales as a result. It appears that Baltimore won't officially bottom until the end of this year/beginning of next year.

If I recall, Jamie posted some MRIS data about a month ago indicating average sales were transacting at about 90 cents on the dollar of average ask prices, so the 240k asks are actually selling at about 216k.

175k to 216k over 9 years is a compound annual growth rate of 2.3% which is inline with inflation over the same period. If the central planners hold interest rates at this level, we should be within the vicinity of a bottom. If however Treasuries prove to be the latest bubble, all bets are off.

It sure appears that every six months or so, the "recovery date" gets pushed back. How long are people going to believe this? Why not just tell the people the truth what really is going on? Foreclosures are continuing to increase. IT HAS NOT SLOWED DOWN!!!!!!!

What other information matters? As long as there are more people losing their home, IT CAN NOT GET BETTER!!!!! People need to wise up and stop believing these phony numbers.

If people couldn't afford their mortgage before, what makes you think they can now? How are prices going up when higher prices are NOT AFFORDABLE?

Let's all face reality. The tax credit is the reason why home sales have been up the past year. Low interest rates today are benefiting the few people left to refinance their current loan, if they haven't done so already. Purchase applications are down to a 13 YEAR LOW!!!! How can this be? You mean to tell me when values were down 30% BEFORE the credit was enacted, home applications were higher then than they are today?

The government has made a mistake in believing they can artificially raise home prices and allow the free market to takeover once they stop the subsidies. Home prices need to keep going down in order to see a real recovery. When prices go down enough, there will be plenty of buyers to step in and buy these properties at their true market value.

The banks are purposefully limiting the supply of homes on the market. If the banks were to sell all of their inventory at once, the market would be FLOODED with homes. This would cause home prices to keep going down. Instead, the banks are only allowing a small portion of their inventory on the market so that they don't take a huge loss on the home. What really is going on is that there is a huge backlog of homes that are just sitting there. It will take about 8 YEARS for the banks to sell their inventory at its current pace.

There is just no way this crisis will be over anytime soon when reality shows it is getting WORSE, not better.

Grant,
You have estimated a timeframe for the btoom. Do you have an price estimate as well? (and an brief explanation of how it was calculated?)

Herr Butcher (Metzger):

Glad to see know the future.

How will you be able to profit from your predictions? (It should be easy if you know the future.)

My wife and I are planning to attend the Pier 1 auction, and this past SUN we toured the homes we could conceivably bid upon.

I left wondering what the homes were worth, and I left clearly convinced that the original asking prices, mostly over $1M, were out of whack with the BAL housing market.

From what I see, there is still mostly downward pressure on housing prices, and I agree with most of the observations given in this thread.

Thanks Metzger! My gut has been telling me just what you said, but my stupid head hasn't been listening! I am packing up and bailing my sinking ship! I was surprised to find so many rental companies that are eager to take me, warts (foreclosure) and all! I will never buy again. I believe Elizabeth Warren now, that people don't buy homes, they buy schools. Since I don't have kids, I don't need to own a home. Plus, I don't ever want to be in a situation where I can't move...Homeownership isn't an investment, and isn't all it was cracked up to be. Take away the mortgage interest deduction (welfare) and what is the incentive? None!

Talking from experience - in more livable Baltimore neighborhoods, the prices dropped just slightly from the peak. There are no foreclosures either, apart from a few absurd situations. It is only apparent that there are a lot, LOT LESS ownership transfers than before. However, the prices are still intact.

Wallace,
I tend to regard "always' and "never" as 4-letter words. I agree with your comments regarding our current time in history, in the midst of this horrific government and bankster sponsored housing bubble.

However, those from the prior generation who bought at reasonable prices in neighborhoods that they found desirable for living in, and did not view their homes as an investment or ATM machine, contradict your thesis. Imagine having your house PAID OFF! , and loving your home and neighborhood? Ah, the American dream.

Unfortunately, we need our fearful leaders to get out of the way and let the free market do its job, such that the dream can take over from this awful nightmare.

House Prices Still Have Another 10%-20% To Fall, Says Gary Shilling

Posted Jun 16, 2010 11:30am EDT by Henry Blodget in Investing, Banking, Housing
Related: ^DJI, ^GSPC, XHB, TOL, KBH, ^IXIC
A year ago, house prices finally stopped collapsing after two years of brutal declines. Over the following few quarters, moreover, they actually rose. This led many observers to conclude that the housing bottom had been reached and that we were headed for a v-shaped bounce.

Not Gary Shilling.

Gary Shilling, head of economic research firm A. Gary Shilling & Co., thinks house prices still have another 10%-20% to fall. Just as bad, Gary thinks this fall will happen over the next three years, meaning that house prices won't bottom until 2013. Most people think prices have already bottomed, or will bottom later this year or next.

Why is Gary so bearish?

Supply versus demand.

Basically, Gary says, we still have way too many houses relative to the number of people who want to buy them. Consumers are under pressure, overloaded with debts and struggling to find work, and the mass-hallucination that investing in housing was a "sure thing" is now a distant memory. These days, many would-be home buyers are moving in with relatives or downsizing or dumping second homes. And the supply-demand balance is so out of whack, in Gary's view, that even super-low interest rates won't keep prices afloat.

http://finance.yahoo.com/tech-ticker/house-prices-still-have-another-10-20-to-fall-says-gary-shilling-504808.html;_ylt=AlnTD2F8nx5Beg3oj5wBXrW7YWsA;_ylu=X3oDMTE2YTRuYjBqBHBvcwMxMARzZWMDdG9wU3RvcmllcwRzbGsDcmVjb3Zlcnl3YXNu?tickers=^dji,^gspc,xhb,tol,kbh,^ixic&sec=topStories&pos=8&asset=&ccode=

Well Darwinrules,

There are very few affordable and desireable neighborhoods in Baltimore that are convenient for a commute to work in D.C.

If I find a studio or 1 bed condo in D.C. or the suburbs of D.C. that offer me savings of "better than rent" I may consider it. However, I still prefer my freedom. I like to move around. Maybe I should have done more research before buying in Baltimore City...But I am jaded now, I would never consider living anywhere there, especially as long as I work in D.C.! You get what you pay for.

I realize now, that I moved to D.C. for things that aren't remotely tied to a house, and Baltimore doesn't offer those things. Again, I would take living in an overpriced studio in D.C. over my cheap 5 bed in Baltimore city anyday!