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Housing prices to go down to inflation-adjusted 2000 levels?

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Filed: Timeline

Home prices could sink an additional 25% over the next two or three years, returning values to their 2000 levels in inflation-adjusted terms.


Shocking though it might seem, a decline of 25% from here would merely reverse the market's spectacular appreciation during the boom. It would put the national price level right back on its long-term growth trend line, a surprisingly modest 0.4% a year after inflation.


Prices won't fall uniformly, of course. Once-booming cities such as Las Vegas and Miami and weak economies like Detroit are likely to fare worse than Seattle or Charlotte, N.C. The price decline will be smaller if it's stretched out over longer than, say, two years, because inflation will have more time to do some of the job of eroding the real value of homes.


"I know you're not supposed to say I told you so,' but I'm at the age where I can do it: Homeownership was oversold," says 67-year-old House Finance Committee Chairman Barney Frank (D-Mass.).


One look at the long-term home price chart tells you all you need to know: Starting in 2000, prices crossed above their trend line and just kept going up. The spike had never happened in modern U.S. history, according to data dating back to 1890 that Shiller painstakingly compiled for the second edition of his book, Irrational Exuberance, in 2005.


Observers with a Calvinist streak see a housing crash as not only necessary but also positive. It will force Americans to live within their means, which will enable the U.S. to work off some of its towering debt, says Peter D. Schiff, president of Darien (Conn.) brokerage Euro Pacific Capital, who was early in predicting the crash. In 2005 the share of gross domestic product devoted to residential construction reached the highest since 1950, when the U.S. was racing to house the baby boom generation and make up for the lack of construction during the Depression and World War II. Now, says Schiff, "if there's any construction, it's going to be factories, oil exploration, mines." He takes almost unseemly delight in predicting tougher times ahead: "Americans are going to have their credit cards taken away from them by the lenders. We're going to turn the American economy into a cash economy."


Man is made by his belief. As he believes, so he is.

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Filed: K-1 Visa Country: China

People who were able to flip houses and reinvest into higher quality areas will remain ok. The folks who had horrible loan terms and took out 'equity,' on appreciation to buy more toys are the most screwed.

Just about every single person told me to buy, that housing always went up, there was no bubble. A home need to be maintained, you pay property taxes, there are things that need to be replaced, insurance cots, etc., and that doesn't even include the payments.

I'd hate to have a $500K mortgage on a house I can't even sell for $370K - still taking a $130K loss, not counting fees, sales and closing costs, etc.

Then again, my stocks have moved downwards about 15% or so and I'm thinking it will also get worse here, so is cash good?

Not really, since we print more money and are constantly adding to the national debt with all our wars, so the dollar's real value is also diminishing.

Heck, I should move to China.

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I'm buying a house soon, so I can hope...

Love timeline:

??? 2003 -------> Started chatting regularly, became good friends

Nov 2004 -------> Fell in love

Jan 2006 -------> Met (in person) for first time

Apr 2008 -------> Wedding

Jun 2008 -------> Closed on house together

K-1 timeline:

Jun 11, 2007 -------> I-129f sent

Mar 20, 2008 -------> Visa in hand

AoS/EAD/AP timeline:

Apr 26, 2008 -------> Wedding

Apr 28, 2008 -------> Filed (forms mailed)

Apr 30, 2008 -------> Forms received by USCIS

May 06, 2008 -------> Cashed check posted to account

May 10, 2008 -------> NOA1 received for EAD, AP, and AoS

May 10, 2008 -------> Biometrics appt date received

May 28, 2008 -------> Biometrics for EAD & AoS

Jun 11, 2008 -------> AoS case transferred to CSC

Jul 05, 2008 -------> AP Approval

Jul 09, 2008 -------> EAD approval

Jul 14, 2008 -------> EAD and AP received

Jul 17, 2008 -------> AoS approved (card production ordered)

Now for my obnoxious signature Meez©:


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