Rock bottom = 3 Br, 2 Ba, $19K
How long has it been since you've seen real estate going for less than $50K? How does $19,900 sound. Believe it or not it was not a foreclosure and it wasn't the lowest priced unit on the local market.
About 4 years ago when I was living in Washington state and watching lots go for $70K on the cheap, I knew that we were living in Lala Land and that the bubble wasn't just going to burst, but that it had to burst. The prices that were common place in 2005 and 2006 were nowhere even close to reality, and in my simple world it had to do with an obvious disparity between wages, the cost of rental homes and the prevailing prices being grabbed in a seeming frenzy that was on it's way up, up, up.
I'm not an economist, but I'm not an idiot ether. 3 bedroom, 2 bath homes going for under $20K (cash only) is a sign that the real estate market is in much more distress than anyone wants to admit.
We spent the day looking at real estate in places that were selling for $260K just a year and a half ago, and now they were stalled out barely over $100K and still no takers. Something is wrong still, and I think that the lack of wealthy investors gobbling up $20K homes as fast as they appear on the market is the most troubling part of this real estate nightmare come true.
The only explanation I can possibly conceive of is that banks are solvent but paralyzed with paper keeping them afloat, and they don't have the cash to move an inch. It appears as though the only folks who are able to move, are those who actually have cash right now. They don't care about your credit, your equity or your job. They want cash, and their willing to take it at rock bottom prices regardless of profit, just to move the product and to squeeze some liquidity into their vaults.
I don't know what the solution is to this mess. I have friends who bought homes for $400K that are now worth $250K, and they still can't sell. It's either go on paying their mortgages, or just throw in the towel and give up.
I have a cousin out west who is in this boat. He has no ability whatsoever to move in any direction, and his choice is to either sink with the ship or just have his attorney file for bankruptcy and start over with everything he has worked for for his entire life, behind.
Some folks are trying to point fingers at Obama, Bush or Barney Frank, each with their own versions of the blame game. Truth of the matter is that although all of the above have proven themselves to be both contributors and co-conspirators, we are dealing with a situation much larger than the bafoons we elected throughout the years to make sure that things like this didn't happen.
In my lifetime I never thought that I would see the degeneration of the foundation of American wealth reduced to rubble, ripe for the establishment, whoever that is during this political season, to plunge us into the place we are right now. Your 401K tanked, stocks are worth next to nothing and you have nothing but the debt you amassed because the bank said "yes" to that second home equity loan. Like it or believe it or not, you're now in one of two camps... Either you're a slave to things you own, or you have nothing. Either way, the only people who have anything of considerable size and scope in regards to net worth, are sitting on assets that are at the mercy of whatever happens to what's left of "the system".
Can we afford the extravagant dreams that are being currently debated? A conversion to a "green" economy or a new health care system?
America is at the cusp of a new age, but I fear that the fact that conversations such as these are not unlike the mad fiddler on the roof, playing as Rome burns.