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The word “correction” is a misnomer applied all too frequently in a misleading way. What homeowners and homebuyers are monitoring is principally where home prices have been and where they are headed. Nationally, the median home price rose 1 percent last year – that on top of the 53 percent rise during the five-year boom from 2000 to 2005. This year, the national median price is expected to fall 1 percent.
By any standards, it is an extreme stretch to call it a correction when a particular asset price rises better than 50 percent and then retreats one percent. Even a relatively large price decline of 12 percent in Sarasota cannot reasonably be considered as a correction when its local market had a 150 percent price increase during the boom. Let’s see, that is 150 steps forward and 12 steps backwards.
2 comments:
Thanks for finishing my post Keith!
Millions of people have been playing the appreciation game for many more years than you might suspect. For many, every dime they have is in their house. Yes, they have ridden housing up 100% or more, trading up, or helocing for money to live on. It will only take a 1% decrease and a tightening of lending standards and they are screwhoohooed.
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