My wife and I have poor credit (because of medical bills!) and were turned down by two banks we approached for a first time mortgage.

Thank God!

We live about 1hr outside of metro Denver (one of the places facing one of the largest foreclosure rates in the country).

If you live within 30mins of Denver a one bedroom house with no electricity and a toxic mold problem sells for about $500,000.

If you live 1hr and 30min outside of Denver (in the cow pastures) you can get a one bedroom with no plumbing, no A/C and a giant hole in the roof for a little under 300,000.

Basically, the housing prices have been so out of control for soooo long that most people consider these house "reasonably priced."

It's so crazy out here. Almost everyone out here has a 2 bedroom ranch that they bought for $300-$400,000 -- and every penny of their paycheck is just going to the mortgage.

This price drop was a long time coming and desperately needed!

A 1 bedroom house (with NO air conditioning) shouldn't cost $300,000! Yet my wife and I felt pressure to get a house because we desperatly need the tax deduction (with a house, we get a refund. Without a house we owe $1,800)Plus everyone told us a house is a smart investment and only idiots throw money down the toilet by renting.

Hee hee.

Glad we waited!

In another few years we'll be able to buy a 2 bedroom for $99,000 instead of the $350,000 we would have paid had we actually been approved for a mortgage.

Thank god the prices are coming back down to middle class reality.

Anon,

"Glad we waited!

In another few years we'll be able to buy a 2 bedroom for $99,000 instead of the $350,000 we would have paid had we actually been approved for a mortgage. Thank god the prices are coming back down to middle class reality."

Well, it goes up, it goes down. Buying when it gets to the point where you think you can afford it is the key.

But this is nothing new.

I find the above post about the Denver market more than a little exaggerated! My mother sold her 5 bedroom house (w/AC, no holes in the ceiling, and nice large yard) last summer in Centennial, about 25 minutes south of Denver in a very good neighborhood with a great school system for about $275,000 which is average for her neighborhood (Southglenn), and she bought a 3 bedroom townhouse about a mile away for about $200,000 at the same time.

My friends bought a 2 bedroom house in North Denver (Denver proper) for $215,000 at around the same time, the house didn't require any major renovation. The house next to them (also a 2 bedroom) is sitting empty, the result of a fix n' flip, and has been sitting on the market untouched for 9 months, priced at $280,000

If you want to see out of control housing prices, come to where I live: NYC. No sign of a housing crash here, the prices just keep going up, up, up! Forget the city, even a 600 sq. ft. one bedroom in South Brooklyn (Kensington, which is about 40 minutes from Lower Manhattan) is going for about $300,000

The "litany" cited is, perhaps, just the tip of the iceberg. Living 1.0 hours from Denver, might, concievably, entail starvation....

Please, don't shoot the messenger:

http://jameshowardkunstler.typepad.com/clusterfuck_nation/

magazine in the Washington DC area. Colorado, Florida, California, Texas and Nevada are among the hardest hit, but they have always had a boom-bust housing cycle, in large part because so much of their housing stock is new or almost new. We noticed a slowdown in the upper end market - above 1.5 mil - more than two years ago. The slowdown has worked its way into the lower ranges. Money for jumbo mortgages - which account for most of the mortgages in the DC area - has started to flow again, and I expect the market to actually pick up for close in properties.

Housing within ten miles of the Beltway will sell - if it is priced right and in good condition. In Virginia, Prince William and Loudoun counties are in deep crisis; in Maryland, Montgomery and Anne Arundal counties are okay but Prince Georges and Southern Maryland are in crisis. My clients tell me that there are lots of buyers with money but they are waiting until November and December to buy - thinking that sellers will be more amenable to dealing as the year is running out.

Anon, I hope you can buy that house for 90K but I wouldn't count my chickens just yet. Although some people will short sell, most will either hunker down and stay in the house or rent it. Don't believe those huckster ads that buying foreclosures is easy and a sure money makeer. (If it were so easy, do you think they'd let just anyone in on the deal??) Start saving some money and repair your credit rating. You'll need it.

so it's not just the hyperoverinflated prices - 700K for a Levitt crackerbox. It's the mindbending greed of the hundreds of tax entities in Nassau and Suffolk counties. $12,000 - or even a lot more is pretty much the norm for many parts of LI. It will be interesting to see them close all public services down once the spigot of constantly rolling over appreciating property values stops and goes backwards. Of course the people in their 60's will cash out for what they can. Right now middle aged families are largely barred from moving to LI unless they already live somewhere else in LI and can roll over their home. So what's left is young families with zero-one children. They get the condos and older unimproved homestock. So - the old people will leave. The middle class is already missing. That leaves the young and the poor. And the hyper rich. Should be fun.

I have never thought that real estate was a good investment, and the numbers back me up. Recently, one of the major newspapers (the Post, NYT???) published the numbers that real estate, even over decades, only has a return of about 3 percent. We are so obsessed with the mortgage tax deduction that we ignore - or don't even understand - that taxes, maintenance, insurance eat up a lot of money. And god, if you buy it, you have to stock it with all kinds of crap - purchased mostly on credit. Being house poor is not a lot of fun - especially in a declining market.

Like cheap credit and the stock market, soaring housing prices were supposed to ease the loss of pensions, health care, and a decent education for the middle class. I can't tell you how many people I know who are in their late 60s and 70s who fully expected to retire on the sale of their big expensive house - and can't.