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Bad economic times, recession could lead to day traders and housing market bottom feeders sinking, property investments, mortgage woes, existing home sales and real estate data
Why do I get this gut feeling that tells me that trying to time the housing bottom is a zero sum game like trying to market time financial portfolio investments? Will the housing market bottom feeders and the day traders shorting stocks ultimately wind up sinking in the same leaky boat?
My understanding is that real estate bottoms tend to stay put for a while, so it's easier to spot them than market bottoms, which turn on a dime.
There's an awful lot of downward pressure out there-- the bubble hasn't deflated yet in all areas. They tend to overshoot on the downside. And now we're in a severe recession that could be a mini or regular depression, which by itself would force prices down further. When interest rates are no longer at "record lows" and the government no longer offers a $15k carrot for home buyers, that will pull out the final supports.
So.....I'd say (in most neighborhoods) the risks of buying in too soon outweigh the risks of missing the very exact precise moment of "bottom."
My understanding is that real estate bottoms tend to stay put for a while, so it's easier to spot them than market bottoms, which turn on a dime.
There's an awful lot of downward pressure out there-- the bubble hasn't deflated yet in all areas. They tend to overshoot on the downside. And now we're in a severe recession that could be a mini or regular depression, which by itself would force prices down further. When interest rates are no longer at "record lows" and the government no longer offers a $15k carrot for home buyers, that will pull out the final supports.
So.....I'd say (in most neighborhoods) the risks of buying in too soon outweigh the risks of missing the very exact precise moment of "bottom."
Agreed. I truly do not think we're close to a bottom yet - anywhere.
We might see a slight "dead cat bounce" (aka the classic "bull trap" when people miscalculate calling the bottom) in the Spring.
Just curious, does anyone here think that a "bottom" is possible with high (10+ months) inventory levels?
Is there a place to see or calculate inventory levels for specific areas?
Or even national levels?
I think levels are actually MUCH higher than that nationally. I noticed tons of properties coming off the market around the holidays. If any of those people really want to sell then I bet those properties will pop back up in the Spring on top of the already expected spring crop. I just wish Spring would get here already.
Is there a place to see or calculate inventory levels for specific areas?
Or even national levels?
Your county or area probably has a site like this that has the market statistics. Google your county (or state) + realtors board of association. Site wcbr.net
For example, the most recent one for December sales : Existing-Home Sales Show Strong Gain In December (http://www.realtor.org/wps/wcm/connect/RO-Content/ro/press_room/news_releases/2009/01/ehs_shows_strong_gain - broken link)
Ignore the obvious spin and repeated calls for of a bottom, and look for the actual numbers. There's 9.3 months of used houses on the market now. New houses are similar, plus they're much fewer in numbers so they don't move the overall average that far.
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You know, all this "real estate bottom" stuff puzzles me. If a person wants to sell a house and has to take less than they thought they would, then that person buys a new house for less than that seller thought they would get, what's the big worry? It's totally relative! In this market housing is down almost all over...and when things lift they will lift all over. I don't get this "wait until it reaches bottom" idea because, first of all how do you know when it's at bottom? And why not buy when you want, what you want, and just be happy when things do lift again? Which they will.
I plan to list my house this week for about $50K less than I could have gotten three years ago...but I also know that I can buy a new house where I am moving to for that much less as well. It seems silly to wait and lose time...at least to me. Of course not everyone is in my situation (I have no mortgage to pay off), but I just don't get the waiting thing.
You know, all this "real estate bottom" stuff puzzles me. If a person wants to sell a house and has to take less than they thought they would, then that person buys a new house for less than that seller thought they would get, what's the big worry? It's totally relative! In this market housing is down almost all over...and when things lift they will lift all over. I don't get this "wait until it reaches bottom" idea because, first of all how do you know when it's at bottom? And why not buy when you want, what you want, and just be happy when things do lift again? Which they will.
I plan to list my house this week for about $50K less than I could have gotten three years ago...but I also know that I can buy a new house where I am moving to for that much less as well. It seems silly to wait and lose time...at least to me. Of course not everyone is in my situation (I have no mortgage to pay off), but I just don't get the waiting thing.
That's my same question. What does it matter if you buy now and then home values decrease slightly after that? Other than you might be kicking yourself because you "paid too much for that muffler". If you intend to stay in your home for a number of years and you are able to get a good interest rate and fair price from the seller - why wait? Are people waiting to see if more desirable inventory comes on the market? Are they looking only at properties as investments? I really am wondering - buyers, if you can enlighten me by explaining your reasons for waiting I would appreciate it.
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