mad anthony

Rants, politics, and thoughts on politics, technology, life,
and stuff from a generally politically conservative Baltimoron.

Sunday, November 12, 2006

I can hear my house's value dropping.....

While I was debating about buying my house, I used to joke that as soon as I bought a house the housing bubble would burst.

That seems to be exactly what happened- or not. From what I've been reading about house prices, they haven't really dropped. What has changed is inventory levels - there are lots more houses on the market, and the number of buyers has either been holding steady or decreasing.

It's probably a bad sign that I've seen real estate brokers and developers running ads that now is the time to buy because the bubble has burst. Being a bit of a masochist, I find myself reading the baltimore housing bubble blog, which seems to be convinced that prices will drop about 50% and that anyone who bought a house in the last couple years is a moron because prices will go back to what they were 5 years ago. Or something.

One of the points that Niki @ the baltimore housing blog raises that I do agree with is that it's going to be hard to sell an older $400,000 house at that price, when there are a number of new developments dropping prices of new homes to that range, and why would you buy a used home when you can get a nicer new one for the same price?

The thing about that is it reveals the problem with overall judgements about where housing prices are going. The housing market is not one thing - it's different types of houses, in different locations, at different price points. There are plenty of new homes at the 400k price point. There aren't many, or any, new developments in the Baltimore county area at, say, the $200-$250k price point. If you want to buy a new house in those areas, you have to go to Harford County or Pennsylvania. So I think there may be less potential for price movement in that range. Of course, that's what I'm hoping.

But housing prices can depend on any given house, not even just neigborhood. Have a feature or a look that a buyer falls in love with, and you may get a much higher price or faster sale than a similar house.

And mostly, this is academic anyway. I'm not selling my house. While there are a bunch of small things I want to do with Casa De Mad (and a few big things), I like the house I bought and, barring any life changes, plan on remaining in it for at least the next 10 years. It would have been difficult for me to have waited to move - I was outgrowing my apartment, and I'm much happier being in the 'burbs than in the city. I made a decision with the best information I had at the time, and I think, if not an optimal decision, it was a decent decision.


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