Some of the Yahoo features seem overly simplistic sometimes and intended to soften our fears and anxieties. This one via CNNMoney.com almost made me scream. What kind of drugs are these people taking?
NEW YORK (CNNMoney.com) -- It may be the best time to buy a house in more than four years.
Home prices have dropped so quickly and so far that valuations - the difference between what a home should cost and its actual price - are the lowest they've been since 2004, according to a report.
Since 2004? Really? Well, hot damn, maybe I'll just saddle up my pony and ride out and buy two then!
I really don't think my memory is so bad, but in 2004 I seem to recall we were in the midst of a real estate boom in which prices were skyrocketing. The fact that now things are back to the level they were then is not what I'd call the bargain of a century. I'm trying to remember what else was going on in 2004/2005... oh, I think that's when I was spending a lot of time watching the Suze Orman show in which she was constantly warning us about a likely housing bubble... back THEN.
"Housing valuations are almost back to long-term norms," said National City's chief economist, Richard DeKaser. He called current affordability "the best in the past four years."
But DeKaser cautioned that home prices could fall even further.
"This isn't to say home price declines are over," he said. "We could move below historic norms. By the end of 2008, housing markets could be broadly under valued."
I'm not telling anyone what to do. You want to go plop down a few hundred grand for a California cottage? Be my guest. Snag 'em while they're hot and there's easy credit.
Who needs drugs when we have reality such as this? Forget that. Have a second opinion and then sleep on it a few weeks.
"The break line of good to bad credit used to be a FICO [score] of 620," he explains. "Over the last year, it's moved to 650, then 680 and now it's starting to push over 700." Borrowers who have lower scores may have to come up with higher down payments, or settle for loans with higher fees or interest rates.
Getting a home with low or no money down, meanwhile, is a thing of the past. Lenders may even require more than the traditional 20% in markets that are especially hard-hit.
That is disturbing news in and of itself as it will eliminate many people from the housing market who previously might have been able to swing a deal. And foreclosures?
Foreclosures are touted as great deals (especially by services that sell foreclosure listings). In some areas, real estate agents have even started taking potential buyers on "foreclosure tours."
In reality, however, buying a foreclosed property — or even one in a neighborhood plagued by foreclosures — is risky. "A heavy concentration of foreclosures indicates that there's some sort of economic problem in the region that will keep your home value from at least remaining stable," says Miller. "Or that there was some speculation and there may still be some air left to come out of that market."
This show ain't over yet folks, so sit yer asses down and enjoy the spectacle.
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