Real Estate Blog - "Have we hit bottom yet?"

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"Have we hit bottom yet?"

"I want to buy a house when the prices are at their lowest."

"How long before the market turns around again?"

"I'll wait a while longer til prices drop a bit more."

"Buy low, sell high" doesn't apply only to the stock market - it applies to real estate as well. However, the problem that plagues stock investors also plagues the real estate investor -- how do we know we have hit bottom?

As real estate agents, we listen to the financial experts, monitor the economy and the real estate market in general, watch the national trends, track home prices and foreclosure rates, and analyze the historical data. But for all that research, and after two decades in the real estate business, I can only offer an educated guess as to when prices will be at their lowest.

The inherent problem in "waiting for the bottom" is that no one knows it is "the bottom" until months later -- and then it is too late. Prices have started to rise, interest rates are fluctuating, and who knows what the economic forecast will be? Bearish? Bullish?

In real estate in Kitsap County, we are experiencing a Buyer's Market. There are too many homes on the market (supply) and not enough serious buyers (demand). When supply exceeds demand, prices fall and competition between sellers flourishes.

If you are considering purchasing a home in the near future, whether to live in or for investment purposes, don't wait! Take advantage of the foreclosures, pre-foreclosures and short sales happening around us. You can find the right home at a good price for yourself and your family.

Posted by Marlene Scheffer, Realtor to Kitsap County, WA on 05/14/2008 02:08 AM

Comments (9)

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9 Comments on "Have we hit bottom yet?"

MAY

2008

Hi Marlene,

You hear it over and over again. We get it from our investors waiting to sell and complete a 1031 exchange all the time. They begin to sound like your kids: "Are we home yet?" I certainly understand their desire to buy at the bottom, but when you know it is the bottom for sure it will be six months past the bottom and on the way back up again.

It is my opinion that we have hit bottom and we will see a leveling off period until summer of 2009.

My thought is - "buy now"! We know there is lots of inventory, interest rates are historically low, and the lenders are getting more and more picky with conditions. If you have the ability to buy now, then do it. The market will swing back sooner or later - I'm thinking sooner.

The idea that buyer's have to understand is they can wait and buy at the bottom but the inventory that is the cheapest is not the quality buyers would choose it price wasn't an issue.So you can wait and the home,style or neighborhood your want will be gone while you search for the bottom.

Ever met a day trader that made money?
Ever met a winner in Vegas?

MARLENE - It has come to the point where REALTORS need crystal balls to let buyers know when the bottom is. Waiting for the "bottom" may end up costing more money in the long run, even if prices drop. The stock market does not have an outside factor, although I imagine that timing the stock market is just as difficult as timing the real estate market. The problem with this mentality is that any gains made by waiting may very well be lost and then some by even a slight increase in mortgage rates. If a buyer is looking to stay in a home for at least 5 years, it is an excellent time to buy.

Bill, and people wanting to sell and move up are a wholoe 'nother blog post!

Brian, there are so many different theories about when the market will actually turn! Problem is that if we are off by even three months, it can cost our buyers money, and then it becomes our fault. So I always add my disclaimer when making predictions.

Good point, Alpine!

MAY

2008

I get that fight daily. I makes people crazy to think that it could take a few months to spot a trend... and even in the stock markets (there are many), it can take weeks to see if there is a bottom... or a false bottom. In fact, one CAN'T know until it is over that it is over.

OCT

2008

The wonderful news is that the bottom will be long and shallow, everyone will recognize it.

The notion that prices will spike like in the past is false. Stocks are highly liquid and people turn them for quick profit. That same idea was the ONLY reason for spiking home prices.

When this market turns, prices will likely start up very slowly. If someone waits a full year after the bottom, they are likley to only lose 2, maybe 3 percent. CHEAP INSURANCE to know the bottom has passed.

The smart buyers will not be 'spooked' into buying early by grim warnings about market-timing.

Anoyone who compares stock volatility and tops/bottoms to housing is, essentially, not knowledgeable.

NOV

2008

I agree with you Marlene :) I just purchased my first investment property. I was able to make the numbers work for me because, like you said, it is a buyer's market and prices are very low right now. Thanks for the blog!

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