Housing Market

The following trend is based on actual 4-bedroom home sale prices in our hometown of Manassas (we are just a few miles outside the city). The trend starts in March, 2007 and looks really close to what we have observed over the past 18 months. This home value slide represents a 40% reduction in home value for our area/size of home! So even for those folks who put 20% down (like ourselves), our home value to mortgage is now well upside down.

click on image to enlarge


Of course, this wouldn't be a huge issue if the home value corrected in a similar fashion over the next couple years, but that is anyone's guess at this point. *My* guess is that with rising transportation costs the suburbs will not show dramatic rises in the next few years, especially the "way out" suburbs (we are 1.5 hour commute to D.C.). Instead I would guess we will see some flat lining in home values or perhaps marginal increases for several years (I am personally pretty convinced that a 40% drop puts us somewhere very near the bottom, at least I hope so).

All in all, it is a pretty depressing situation for anyone who bought a home from 2005 to early 2007, or those who refinanced against their equity in that same period (a lot of folks fall into that second category I am sure). What irks me is that the sub-prime mess created by unscrupulous lending has now really impacted those with traditional loans and significant down payments. Yet those unscrupulous lenders that hawked teaser rates and no money down to people who couldn't afford a home, are now being bailed out by the government. Sorry if this is starting to whine a little, but it just doesn't seem fair in a country where we pride ourselves on talking about "market forces" and the ilk.

For the Tennyson family, as we wistfully look back West and start to think about future plans to move nearer our families, this economic "blip" has very real consequences. Pretty damn depressing if you ask me.

Updated: Here is the LINK to the site where you can pull similar trends for your area/size of home. Once you select the city closest to you, click on the "view graph trend" link next to average home price. Make sure to select the # bedrooms for your home once graph is up and then update.