A $500,000 Home for $200,000
That seems like an impossible deal, but it is true that home prices have dropped in some markets drastically.A CNN article talks about how a family in California bought a house for $250,000 when a few years ago it was selling for $550,000. According to the article, "housing prices in 20 major cities have plummeted at record levels, down 19 percent from a year earlier. Home prices have plunged 29.1 percent nationally since they peaked during the second quarter of 2006, according to the S&P Case-Shiller Home Price Index."
If that doesn't sound like a great opportunity to go out and buy, then I don't know what is. For people with good credit and strong finances, these great deals are not to be passed up.
One thing that our readers do need to keep in mind though is that the media is in their role reporting news that catches people's eyes. New York has not been as hard hit relatively as the superheated markets, so these 50% off deals don't always exist here since there never was inflation of prices at levels close to those of markets like California, Florida, or Arizona. The other thing to be wary of is the fact that new construction homes don't face the same dynamics as resale homes, which these news stories typically focus on, and haven't dropped nearly as much, since the builders still aim to recoup at least their costs in building homes.
Nonetheless, great deals are out there if you look. As the family from the article said, "It's unfortunate for those who are going through such tough times. But in some ways, we were really glad that we were able to do something we wouldn't have been able to do otherwise."
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