I took a look at the MLS yesterday to get a sense of what home prices are doing. While most of the houses listed in our area (Broward County) were still ridiculously overpriced, I did see some serious movement in the bottom end of things, with houses previously listed at about 212k fallen into the 110k range. These are of course complete fixer-uppers with green pools, leaking roofs, wall-unit a/cs and the like, but it's good to see the drop happen.
Does that mean it's time to buy in South Florida? Not by a long shot. THIS story takes the long view of the entire country's housing situation, and mentions early on:
The New York Times asked economists across the country to share the data they use to figure out how much houses in regional markets are overvalued, a calculation that approximates where the bottom may be. Models built on these variables show that while some markets — such as California — are on a road to recovery, others — such as south Florida — have a way to go.
The story is worth reading in its entirety, especially since they collected data from a wider variety of sources than usual, using a wider variety of methods, and you'll doubtless conclude (if you are, like me, someone who hopes, someday, to own a home), that it's best to wait until mortgage rates return to something more historically normal:
“As long as anyone can remember, as long as we have data, mortgage rates have been about 1.6 percent above the 10-year Treasury rate,” said Christopher J. Mayer, an economist and senior vice dean at Columbia Business School. “Today, it’s more like 2.5 percent above the 10-year Treasury. That’s a gigantic difference, literally reducing the amount of house someone could afford by 20 percent.”
It's also best to wait until either median incomes catch up with house prices or house prices fall into the realm of possibility for median income earners.