Lately I've been reading the Irvine Housing Blog a lot, which is grimly fascinating. (Interesting that they have too-bearish trolls, who say "that place is only worth $170,000!" when there's pretty much no way the place will go that low absent heavy artillery fire, but few or no "real estate is actually undervalued!" trolls. I think there was more realtor heckling in the early days of the blog.)
Along the same lines, look at this LA house (in Atwater, which I know nothing about other than that it is next to Silverlake, and I gather less desirable) on Craigslist. It is being offered for rent at $2600 per month, and for sale at...$650,000!! The online mortgage calculator I tried gives me a monthly cost of about $5,000 for that price, including a low tax but nothing for repairs/maintenance. Unclear how much the initial downpayment was meant to be in that scenario; strangely the online mortgage calculators don't seem to have a box for that information. Surely it's very relevant to the costs?
In any case, looks like there's still plenty of adjusting to do. We're considering moving back to the states in June 2009, hence the interest. You might think I have better things to do than try to find comparable properties on the rent/sale pages of LA and DC Craigslist and compare their monthly costs, but you would be wrong, because I'm sick. I mean, I'm physically ill; I don't think my morbid preoccupation with falling house prices is that bad. There are going to be lots of financially strapped people in this mess, but things are really looking up for first-time homebuyers.
UPDATE: I imagine things are also looking up for people who bought their house some time ago, have lots of equity in it due to price increases and never having taken out a home equity line of credit, and can now re-finance at super-low rates. (Wonders whether anyone is actually in this position...) Hey, mom, what's your interest rate?