Recently an article came out in one of the e-mailed real estate publications with the headline "housing markets will roar back in 2009". Now, I'm a glass half full kind of person, but even Pollyanna herself would have had trouble buying into that level of optimism. The article based the assumption of rapid recovery on the decline of foreclosures in December as compared to October...with no mention of the fact that there was a moratorium put on foreclosures in December! Of course there were fewer foreclosures...because they were prohibited for many lenders. Oh and don't look for the foreclosures to go up substantially in January as Fannie Mae has extended the moratorium on foreclosures and evictions through the end of January with Freddie Mac soon to follow.
The article also predicted droves of buyers coming into the market with the subsequent absorption of the inventory and even predicted that prices would move up. I have not yet been trampled by the stampede. There has been a slight uptick of activity, but that has long been predicted as a by product of improved confidence with a new administration. Droves? Roar? No, more like a trickle and a whisper.
My crystal ball is cracked and I'm the first to admit it. Did I see the rapid decline in the real estate markets (and the general economy)? No, but I'm in good company. Many if not most of the "experts" did not foresee the extent of economic turmoil that we are currently facing. However, realistically I think we have a ways to go before we start the long, slow climb out of the trough of this real estate cycle.
My reasons for erring on the side of conservatism have to do with 1)the current and predicted job losses, 2)the still tight credit markets and 3)the paralysis brought on by uncertainty in the general health of our economy. And, probably more importantly, I'm looking at incredible bargains that are on the market and they aren't being snapped up! Usually the end of the downturn is signalled by the appearance of the vultures...savvy investors ready to grab up real bargains. When those real bargains (e.g. properties on the market for their value in 2002...or earlier!) sit on the market, I have to conclude that we are not at the end yet.
My prediction (and remember, my crystal ball is cracked) is that we will not see the beginning of the recovery of the housing market until the end of 2009...and full recovery will take another couple of years thereafter.
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