Have Houses Become Cheap Enough for You?

Have Houses Become Cheap Enough for You?

A few years ago home prices were way out of reach for most of the country but greedy lenders led homebuyers to believe they could have anything they wanted. But like the old adage goes, “everything that goes up must come down.”  The average home is about a third cheaper than it was at the peak three years ago, a plunge unprecedented since the Great Depression.

Looking at our economy today and the number of people affected by this recession most would say homes are still overpriced. Of course they are; everything is overpriced because that’s capitalism at its finest. Factor in declining mortgage rates as well, and our housing market starts to look cheap by many measures. Thirty-year mortgage rates, at around 5.5%, are still low by historic standards.

And we are enjoying not one, but two, gigantic taxpayer subsidies – an $8,000 first-time homebuyer tax credit and a $6500 repeat-buyer tax credit.

If you are able to snag a low interest rate that helps you secure a comfortable mortgage and you are aggressive on price, you probably will get a bargain. That’s especially true if the owner *must* sell. Foreclosures and other distressed sales are selling for about 20% below the rest of the market. There are opportunities out there if you take the time to do some work.

Here’s a snap shot of what homes cost in past years.

                  2000      1990      1980       1970      1950     

Midwest               

Illinois          $130,800  $103,400  $104,500   $76,000   $52,400         

Missouri           $89,900   $76,400   $72,600   $53,700   $38,800         

Nebraska           $88,000   $64,400   $75,200   $46,300   $35,900         

Ohio              $103,700   $81,100   $88,900   $67,600   $50,300         

South                                   

Alabama            $85,100   $68,600   $67,100   $42,400   $27,100         

Arkansas           $72,800   $59,200   $61,600   $33,000   $24,800         

Georgia           $111,200   $91,100   $73,000   $46,800   $31,700         

Florida           $105,500   $98,500   $89,300   $58,100   $40,100         

South Carolina     $94,900   $78,100   $69,500   $37,000   $31,000         

Tennessee          $93,000   $74,600   $70,500   $40,900   $31,900         

Mid Atlantic/North East

Dist. of Columbia $157,200  $158,300  $136,200   $75,900   $87,800         

Maryland          $146,000  $148,800  $115,400   $71,800   $48,700         

Pennsylvania       $97,000  $89,100   $77,400    $52,200   $42,400         

New Jersey        $170,800  $207,400  $119,200   $89,900   $63,100         

New York          $148,700  $168,100   $90,300   $86,400   $61,500         

West

Alaska            $144,200  $120,600  $151,000   $44,800   $21,100           

California        $211,500  $249,800  $167,300   $74,400   $57,900         

Nevada            $142,000  $122,300  $136,000   $86,000   $53,700         

Colorado          $166,600  $105,700  $126,900   $43,300   $21,800

SouthWest

Arizona           $121,300  $102,300  $108,500   $54,700   $36,000         

New Mexico        $108,100   $89,600   $89,700   $49,900   $34,500         

Texas              $82,500   $76,100   $77,400   $46,100   $35,200         

So when you factor in all of those variables do you think houses have become cheap enough? Yes! Contact your realtor today!