Don’t you dare buy a home now. You will lose money.
[Real estate agents complain, insist that real estate is regional, and there are some places where it is a good time to buy. Cramer responds…]
Seattle, and 10005 are the only two. Maybe Montgomery County in Maryland. Three. That’s it.
So, according to Jim Cramer, September 2007 was a good time to buy a home in Seattle. Everywhere else, home buyers were setting themselves up to lose money, but not in Seattle.
Let’s have a quick check on how that’s turning out.
King County median SFH price: $450,000
YOY appreciation: +5.9%
May 2009 (20 months later)
King County median SFH price: $375,000
YOY appreciation: -14.8%
Total price change: -16.7%
Whoops. And for those of you keeping score at home, the drop in Seattle’s Case-Shiller HPI was even more steep, falling 22.2% from September 2007 through March 2009 (the latest data available). In other words, if you bought a Seattle-area home in September 2007 with 20% down, your “investment” is now most likely completely gone.
Not that anyone really thought that Jim Cramer had any credibility (anymore/ever) anyway, but it’s certainly entertaining to revisit proclamations like this once in a while.