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....This is rarely the case still, as there are a lot of buyers who bought during the credit years and wanted to flip it for instant profit, but now find themselves under water.
"Credit years." I really like that. Brilliant. From here on out, that's the phrase I'm going to use instead of "boom years." It's much more accurate.
When the bottom actually hits, will you recognize it? (Or has it already hit bottom?)
If history is any guide, it doesn't matter that much. Bottoms last for years, and are followed by additional years of very minimal gains. If you're a few years late, you only pay a bit more ... and you get to finance it so it's not that painful.
Get in too early, on the other hand, and the leverage eats you alive.
Edited to add - my prediction the last time this was asked was 2012. I was called pessimistic then, but now with all of the government interference I'm wondering if I shouldn't revise it out to 2015 or later.
I'm bearish too, although my predictions are a bit different than yours.
If TIME says we're nowhere near a bottom, then I have to believe they are. For the same reasons they run articles like "now's the time to buy stocks" in 87/2000/2007 or "real estate is hot" in 2007 they are always lagging and not leading indicators of a trend change.
It re-affirms my belief in nominal dollars we're near a bottom but inflation will chew away at value over the next decade.
This is my take; If the prices go down another 10-15% then most people who bought in 2009 would be under water. So the government would use everything it has to prevent this from happening (second recession). What they can not do is to create a boom. So we will sit at this range (+/-5%) for a long time.
Foreclosures will only increase as 5/1 loans continue to roll. I think we have another year at least before we see a "bottom". I also think that "bottom" will be flat for another 3-4 years with very minimal growth in values. Home prices traditionally follow incomes, and incomes will in no way, shape, or form increase for a few years in the United States.
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Oak Park and River Forest market
