Homeowners’ big question: How low will prices go?

Posted by Kendall Harmon

Eric S. Broida wants to trade up. He has been eyeing a multimillion-dollar house near his Pacific Palisades home and thinks it might be a bargain. Eventually, that is.

The 4,600-square-foot house has languished on the market for six months. The sellers have cut the asking price several times, slashing it from $4.6 million to $3.6 million.

When the price falls by an additional $400,000 or so, Broida will be ready to pounce.

"There is nowhere to go but down from here," said Broida, a leasing broker for office space. "I know it in my gut."

Few would argue. Southern California home prices have fallen for five straight months, according to data released this month, and are now down 12% from their peak last spring and summer.

For most of this decade, skyrocketing home values were a frequent topic whenever people gathered along soccer sidelines or at backyard barbecues. But the conversation has taken an about-face, noted Jeff Vendley, a Ventura mortgage broker who is trying to sell two Oxnard town houses he bought in 2004 and 2005.

Now, he said, people are wondering, "How low we can go?"

Read it all.

Filed under: * Economics, PoliticsEconomyHousing/Real Estate Market

Posted November 28, 2007 at 12:04 am [Printer Friendly] [Print w/ comments]

1. Bill Matz wrote:

Once again (for the umpteenth time!), the median price comparison does NOT show what home prices are doing because the median house is a different house each month. The only value of the median price is showing where “the middle of the market” is.

For the mass media to keep repeating this myth can only reasonably be explained by ignorance or laziness. The median price is easily obtained from any Realtor, whereas actually determining price movement requires a much more time-consuming study, probably by a qualified appraiser and/or economist/statistician.

It is possible for prices to be falling while the median rises (move-up buyers scooping up bargains), or the median can fall while prices are rising (people priced out of market settling for lower-priced homes). But the bottom line is that the median cannot be used to determine price movement because it is impossible to make an apples-to-apples comparison.

The American media has been shamefully and incompetently culpable in exacerbating and - to some degree - even creating the current real estate panic.

November 28, 1:24 am | [comment link]
2. Br_er Rabbit wrote:

Gee, I’m really really really really really really really worried that a $4M house should sell for $3M.

November 28, 6:21 pm | [comment link]
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