What is all about this too negative of a report.

[angrybull]

This report was recently published on business week, though it seems like there is some truth to it, it does not seem to be the complete truth.
The report indicates that the housing prices may reset to the pre boom period prices, indicating a drop of "possible" (though not guaranteed) drop of 39% in the Seattle market.

I had made an offer last week that got rejected, therefore i was considering uping the offer till i came across this report and stopped.

Please take a thorogh look and comment. The smarter people out there, please try and educate the naive first time buyer like me.
Your input is very much appreciated .
thanks
The report : http://finance.yahoo.com/real-estate/ar ... g-Meltdown

Addendums to the report:
Shedding gains: http://images.businessweek.com/ss/08/01 ... dex_01.htm

Dissolution: http://images.businessweek.com/ss/08/01 ... dex_01.htm

Analysis:
http://images.businessweek.com/ss/08/01 ... dex_01.htm

[Markor]

Yeah Seattle area house prices could fall 50%. But consider the possibility that Seattle has become more popular relative to other cities since the bubble started. Take for example a house close to the Bellevue city center. If the house has increased in value by, say, 70% since 2003, it's hard to say how much of that increase is irrational exuberance (bubble) and how much is due to the fact that Bellevue office space is set to roughly double in size between 2003 and 2010.

[ira s]

Just like the article stated, there are pessimists and optimists out there regarding the housing market...Or so they like to say..I like the idea of home prices dropping, but i don't think I'm a pessimist.
The Seattle area is expected to grow, and even though we are part of and affected by the national economy, if the local employment scene stays robust and if people do continue to move to the Seattle area, then perhaps the drops in home prices won't be as severe here as they will be in other places.
Personally, I just can't see local prices dropping 50% from the top. Nationally, home prices peaked about a year or 18 months before Seattle peaked. Does that mean our home prices will decline for a longer period?
I don't know. But I do know that in desirable neighborhoods in Seattle, if a house is well priced, it doesn't stay on the market long, even now.
And the whole economy is a mess, nationwide. There's a lot less money out there available for lending, so even with low interest rates, it will take significant price declines to get all these folks eligible for loan qualifying.
I'm guessing we will see a bottom around the summer of '09, and then a flattening for a couple of years, with prices starting to rise sometime in 2011.
Since August of this year, the median price of a local house has declined, I'm not sure how much.
Given the strength of the local economy, I don't think the median price of a Seattle home will fall an additional 25%,
but I could easily see an additional 10% decline or possibly 15.
There is a huge inventory of local homes right now, and that number is growing. The effect of that can only be lower prices. So don't worry about "losing out" on a house because an offer was rejected...There will be plenty more to choose from.

[perfectfire]

[Markor]

That would be difficult to do, because we don't know what rents or house prices will be in 2010. Buyers in Bellevue (like me) may be anticipating increased rents due to the greatly expanding (but not yet filled) office space. Presumably many of those who will fill that office space live elsewhere now. That said, a lot of houses I see on the market in Bellevue are now hovering around a 15-year historical price/rent ratio.

[angrybull]

[deejayoh]

20 years of history would say rent increases pretty much track income increases. So if the new buildings drive incomes, then they might drive rents. If they drive population, developers tend to build more apartments and houses more than quickly enough to meet demand.

[Markor]

[perfectfire]

[ira s]

Not only are 50's & 60's houses often solidly built, they are also often " Mid Century Modern" cool, think Jetsons.
Too many recently built homes look just like all the other recently built homes.

[Markor]

[Markor]

[Markor]

[deejayoh]

[perfectfire]