That is the million dollar question, right? I hear so many different answers to that question everyday. From, "...we have hit bottom...", to "...we have at least 2 more years to go...". I don't claim to know the answer but I do know that no one else can either and that is the real travesty, because allot of people are claiming to. That can only make things worse.
It was the general consensus only a couple of years ago that real estate only goes up. We were wrong, but that didn't stop that myth from influencing thousands of buyers to buy over-priced properties, knowingly. Now, many of those same buyers (now homeowners) are rightfully questioning the whole myth of real estate's valuation. In fact, they are realizing that they bought a home, not an investment. Even the buyers that bought early in the boom around 2002-2003 have seen all their gains evaporate. It is as if those years never happenned.
It is interesting because here in San Diego the rapid drive up in home prices was justified by people claiming that we were just making up for lost time from the real estate recession of the arly 1990's. The argument was that real estate was stagnant for about 4 to 6 years here so we were just making up for those years with larger than normal price increases. If that is true and we have now wiped out all those increases than values should be in line with 1990's levels. I haven't seen that yet.
When people now claim to know when this will all end, they are committing the same fraud that they did when they said that this could never happen. Maybe we should all just wait and see.
For what it's worth I still see a large percentage drop coming. I look at incomes and I rationalize that prices have to stay somewhat in line with incomes. It only makes sense. Excepting the all cash buyers and the $10 million homes, most homes are bought by working stiffs like you and me. We rely on our income to pay the mortgage and so it doesn't matter if home values have significantly dropped if they are still so far out of line with incomes. Incomes are not rising these days, in fact many are going away completely, so until incomes stabilize I don't think home values will. But I will say that I am just theorizing. I really just don't know and I'm alright with that.
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Aloha,
We seem to have to work 3 times as hard for 1/3 of the pay. But, you know what? At the end of the day, or the crisis, those of us who persevered will have learned to and will be ready to survive any market... and will. Those who came into this as order takers are having to learn all the old school stuff now and most are not surviving. I think it's nice to see the decrease in the number of agents.
Have a great week and much Aloha,
Patrick J. Lambert R/S
Century 21 All Islands, Hawaii
808-937-1188
www.patrickjlambert.com