Comments on: Glad to Be A Renter http://www.washingtoncitypaper.com/blogs/citydesk/2007/11/28/glad-to-be-a-renter/ D.C. News, Politics, Media, Arts, and More Mon, 23 Nov 2009 18:31:39 -0500 http://wordpress.org/?v=2.8.1 hourly 1 By: Jesse Kaye http://www.washingtoncitypaper.com/blogs/citydesk/2007/11/28/glad-to-be-a-renter/comment-page-1/#comment-78041 Jesse Kaye Fri, 07 Dec 2007 13:00:55 +0000 http://www.washingtoncitypaper.com/blogs/citydesk/index.php/2007/11/28/glad-to-be-a-renter/#comment-78041 You might be right on that. I uploaded a video blog to my site yesterday stating something similar. While I think your estimates may be a bit over the top, I believe they will fall for at least another year, but only for home prices over $417k. The reason? Banks are no longer lending at 100% purchase price over the $417k price. While I cannot blame them for the action taking place, it only hurts the homeowners in the category. For the past 5-8 years buyers have been able to get 100% financing and have not had to pay a down payment. Now, with the subprime mess they will have to pay 10% down and if they are VERY lucky, only 5%. Since it has not been historically required for buyers to pay a down payment, the buying pool has not saved up. Until they do prices will keep falling. Which takes me to the next point. At a $900k house, how long would it take the average purchaser to save $90k? You tell me! You might be right on that. I uploaded a video blog to my site yesterday stating something similar. While I think your estimates may be a bit over the top, I believe they will fall for at least another year, but only for home prices over $417k.

The reason?

Banks are no longer lending at 100% purchase price over the $417k price. While I cannot blame them for the action taking place, it only hurts the homeowners in the category. For the past 5-8 years buyers have been able to get 100% financing and have not had to pay a down payment. Now, with the subprime mess they will have to pay 10% down and if they are VERY lucky, only 5%. Since it has not been historically required for buyers to pay a down payment, the buying pool has not saved up. Until they do prices will keep falling.

Which takes me to the next point. At a $900k house, how long would it take the average purchaser to save $90k? You tell me!

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