Price/Sq Foot can be a useful relative measure when looking at the big picture, but it is not perfect, especially when comparing two houses in the same area. It does not take into account such things as lot size or improvements (like landscaping, swimming pool, granite etc.) or even the overall condition of the property.

From what I gather here and on other blogs the “Bottom” you speak of ain’t going to look pretty. It will be flat for quite awhile until certain fundementals change.

Firstly, with tightenned credit or rather a return to historical norm (30yr fixed, 10-20% down) a home must be affordable, i.e. 2-3x family income.

Second, wages must keep up with inflation. An impoverished citizenry can not afford home ownership. Outsourching, offshoring, and H2B visas may help the corporate bottom line but it won’t help Americans.

Third, inventory levels must return to the 4 month or less level. Excess inventory depresses price but if prices are too sticky coming down expect inventory to remain high.

And lastly, America’s debt to savings ratio must dramatically improve. This IMO is critical. How do we dig ourselves out of this hole? Forgiveness? WTF! Eveyone gets a clean slate from JPM/BS down to J6P? That ain’t gonna work in the long run. As Ollie used to say to Stan “That’s a fine mess you’ve gotten us into”

Loved the article! You’ve perfectly articulated an argument I’ve had with several folks about home values in the Dallas area. There are really only two valid comparison points: price per sqft and building class. Here in Dallas, class 14 is a track brick venere, where class 23 is a quality custom. So where class 14 may go for $75, the class 23 will go for $120. But it still isn’t apples to apples. It’s actually the higher quality homes (and therefore more expensive) that are taking the biggest hits in my area.

Can anybody shed some light into what a “potential owner-occupant” is? I don’t think that’s a checkbox on your mortgage app.

hey twist – you talk about the recovery being a long way off. I think it’d be nice to have a solid definition of what a “recovery” will be. If you listen to the NAR, they’re spinning a “full recovery” (I guess 2005 prices?? And of course, this will happen in 2H08…). Knowing that won’t happen, I’d love to hear peoples’ opinions on this. What will the bottom look like, and maybe discuss the next few years as we enter the “recovery”.

A sales increase due to foreclosures, short sales and REOs is hardly a good sign.

http://www.foreclosureexpert.info/2008/05/forget-the-aver.html

haha

If this 15% increase had been “seasonally adjusted” in the same way todays gasoline price was (and showed a 2% drop because if it; on what planet did gas go down last month???), then this number would actually be down 20-25% still.

It’s amazing how numbers can tell you anything you want to hear if you just use the right formula.

We are a long, long way from over on this.