Two real estate factoids to chew on this morning:

Teresa Boardman, Realtor and writer of the St. Paul Real Estate blog reports she’s seeing huge drops in asking prices.

I am not making this up. I am seeing homes listed in the MLS that have been reduced in price by $100,000 dollars. in one case the home was listed for slightly more than $200,000, when it went on the market a year ago and is now listed for 108K. I am watching it now to see how many days it remains on the market. It is bank owned and some of the banks have figured out if they make the price low enough they can get multiple offers and get more than they ask for it.

Meanwhile, according to Dakota County, even if your house isn’t worth a small fortune anymore, it’ll still be taxed as if it is.

According to the Star Tribune:

Because so many protections are built into the system, the housing slump won’t truly work its way into the household budget until next year. And it won’t kick in big-time until the year after that, county assessor Bill Peterson told the county board in a briefing.

  • bsimon

    At the market peak, values were driven by cheap mortgages and lax lending requirements. We saw record homeownership rates – in the midst of a growth in real estate valuation that far exceeded normal ratios of income to home value.

    Now that mortgage lending standards are tightening up, who can qualify to buy all those homes? I’ve yet to see an economist discuss the relationship between the number of homes available & real estate valuation to the wages of Americans. It seems like prices still have a long way to fall, before they’re back in the range of ‘affordable’ for average Americans.

  • Alison

    The other part of this crisis I don’t see anyone talking about is the amount banks were letting people borrow. I’m sure this drove the McMansion boom. We have outstanding credit, but even so, when we applied for mortgages in 2000 we were offered limits of more than 2 times what we thought we could afford. We only used what we thought we could pay and our estimates turned out to be right. For those whose don’t have as a good a command of their finances, I could easily see them going for the maximum amount because the bank said it was alright.

    This had the potential to hit families with young children especially hard because child care costs were not factored in by lenders in determining how much you could afford. For us, child care costs were, until recently, a bigger portion of our budget than the mortgage with PMI, taxes, and hazard insurance.