Predictable Equilibium

By
Real Estate Agent with Coldwell Banker RE LLC

Everybody wants to know when the depreciation will finally stop.  Truth is, that you can ask 10 different real estate professionals where the bottom of the market is, or whether we're perhaps there already, and you'll get 11 different answers.  So for the already skiddish consumer, the seemingly contradicting advice that they're getting from us further contributes to their anxiousness about buying or selling real estate.  Furthermore, the mass media with their all-too-common "sky is falling" reporting now has many consumers in a state of sheer panic.

From 1980 to 2000 real estate prices in The United States appreciated at a rate of roughly 5% per year.  From 2000 to 2006 real estate prices in The United States appreciated a total of 89%!  This makes absolutely no sense, and it's easy to see why prices have come down so much from their highs in 2006.  The market today is simply finding the predictable equilibrium that it enjoyed up until 2000. 

Generallyspeaking. price levels today are what they were in 2001-2002; or in other words where they were before the craziness took over.  The predictable equilibrium is all but upon us.  Lending standards have once again returned to normal, and real estate aappreciation will soon return to a normal rate of 5% per year.

I 've had many a home seller say to me that if they can't get the price that they want for their property today, that they'll simply wait for the market to recover in 12-18 months.  While it is true that we'll be well into recovery mode within that time span, and considering that the market will have found it's predictable equilibrium by then. procuring those 2005 price levels in 18 months will not be possible.  In short, if one needs or wants to sell my recommendation would be to sell at today's price and then reap the benefits of a buyer's market on the other end. 

 

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Rainer
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Carlos Lobato
Coldwell Banker RE LLC - Miami Lakes, FL

Zulema,

I'n not quite sure what you're trying to say, but I think you mean " This Victorian gem is being offered at auction",  right?  Let me know...

Aug 12, 2009 01:26 PM #1
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Rainer
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Carlos Lobato

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