Housing Market Predictions: We've Heard Them All, Except the One That Matters ... Yours!

Real Estate Agent with Realty Executives
  • Housing will not fully recover until 2012.  That is when the glut of backlogged foreclosures is expected to be phased out of the market. 


  • Housing will recover by the end of the year.  Now that inventory has contracted to average levels for what constitutes “normal” regional markets in major metropolitan areas where prices have declined as much as 50% in the past three years, and month to month sales have steadily increased over the past six months, demand has realigned with supply to arrest the freefall in values.


  • The housing recovery began in early 2009.  Median price increases in some markets indicate that even while many pundits were openly wondering when the bottom of the market would appear, it was actually several months in the rearview mirror.

Many factors and variables, and just as many divergent opinions to boot.  So many, in fact, that you almost have to choose amongst the purported experts to determine whether you fall in the half empty or half full category.  Job rates, interest rates, unemployment rates … psychiatric rates, for spending too much time poring over the data and extrapolations will render one in need of a head exam. 

Overanalysis 101.

You don’t need flow charts to tell you where things stand at the moment.  You won’t need a market report to tell you when things are better.

You’ll know the market has recovered when you no longer dread the trip to the mailbox or evening phone calls.

You’ll know the market has recovered when you can confidently re-enable automatic bill pay from your checking account instead of prioritizing which ones get paid this month by how far past due each is.

You’ll know that the market has recovered when you don’t have to decide whether you or a loved one is really ill enough to warrant the cost of a trip to the doctor.

You’ll know the market has recovered when you no longer have to explain to the kids why you can’t go to the zoo or stop for ice cream today. 

You’ll know the market has recovered when sleep comes as readily as worry formerly did.

You can stop looking to someone else to tell you when the market is fully healed as the housing implosion is the root of these greater ails.  It’s far easier to take stock of your own life, and those of your friends and family, to see where along its arc the pendulum is currently settled.  As the finance/housing sector dragged our economy into the muck, it will again lead us back to dry ground.  No need to watch the stars for celestial clues.  Just do what no pundit can and watch your own life for improvement.  You’ll know housing has recovered when both of your own feet are planted squarely on terra firma. 

Most importantly, beware the forecasts that don’t jive with your own internal index.  Those who would adamantly assert the rosiest or bleakest prognosis are likely more interested in influencing your behavior than in your well being. 

“Buy now before prices shoot back up!” 

“Sell now before prices erode further!” 

When you stop listening to yourself, you risk placing all of your trust in the megaphones of those who have a vested interest in your fear.

Is the housing market improving?  Is now the time to buy?  The time to sell?  For months, I have been asked to provide the answers to these questions.  I have dutifully provided my vague predictions with the obligatory caveat that no one truly knows how a free market will behave from one day to the next.  I realize, though, that in supplying answers to those who actually give the market context, that we have all been looking at this thing from the wrong perspective.  It makes zero difference where I think the market stands at present, and where it is headed.  The very consumers who ask me these questions are the ones who will ultimately provide the truth or fallacy to my various hypotheses.  So I turn the tables and ask the consumer, the actual authority, the very same question. 

“What is the state of the Real Estate market?”

Feel free to comment here or send me an email with your thoughts.  Looking for opinions from consumers and laypersons, not agents or financial wizards (all comments welcome, though).  I will post the results in a follow-up piece.

Mr. Homeowner & Mrs. Homebuyer, the floor is now yours.

Comments (125)

Fran Gatti
RE/MAX Integrity - Medford, OR
Managing Principal Broker - RE/MAX Integrity


You are right of course.  The current economy is personal to each and everyone of us.  I have investors who are taking full advantage of these low prices and do not seem to have a care in the world and the other extreme, seller's who are losing it all. 

I also have my personal take on how it is affecting me.  For me personally, the market has not yet turned positive as far as the ability to be able to sell my own residence.   When that happens, some of the pressure will lift. On the other hand, I am having my best year ever as far as number of sales and volume go.  The economy can truly be a double edged sword.

Great post. I re-blogged.

Nov 19, 2009 05:35 AM

Great post & some good comments.  Think of the market correction & recovery as the Nike symbol.  A rapid down & flattening off & a long tail back up.  Also think of the market as one of many smaller sub-markets.  In my area, some sub-markets have hit bottom & started their way back up, while others are still in decline.  Knowing each particular sub-market & its characteristics is important in answering peoples questions about "their" homes recovery & where it is.  Supply & demand, Days on market, list price to sales price ratios, seller consessions, percentages of normal sales vs distressed sales, etc are all factors to look at. There are different factors that could dictate a persons need to do something NOW as opposed to later, & each case is an individual one.  This is a time when we need to be in the know consultants more than ever.  Sometimes that will not lead to a NOW sale. 

Nov 19, 2009 06:28 AM
David Mackey

My comment is for Sandra Nickels.  Evidently you forgot that you were once an amature.  Paul is right, there are no experts, even he doesn't claim to be one.  We are all in this together.  A true professional is a leader and a leader is someone who is honest, reliable and credible.  Home Buyers and Sellers need to know that we are all of those before they will trust what we say to them.  We need to be leaders by supporting  one another as all of us are going through these hard economic times together.  We need to help our clients gain confidence in our industry so they don't fear coming to us.  We need to help our clients understand that the bottom line isn't more important than they are. Once housing starts to move, our economy will start to move. 

Nov 19, 2009 02:47 PM
Kelly Tressler

Loved the post Paul, I couldn't of said it better myself!


Nov 19, 2009 09:07 PM
Cathy Tishhouse
RE/MAX Showcase Homes - Royal Oak, MI
Royal Oak Real Estate

I am in Michigan in Metro Detroit and we are asked this all the time and publicity pretty much says we are one of the worst - not to mention the negative press with the Mayor fiasco etc.  However, this is my best year yet.  The market is what it is and we do what we can to adjust and keep being the professionals that we are.  I work with a couple of invesotrs - a lot of buyers right now with less focus on listings.  I don't spend a lot of time speculating - I look at my life like you so insightfully pointed out and then do what needs to be done.  My investors are losing out on many offers because of out bidding - good sign - and then I can find an equally negative sign.  I love being a Realtor and I focus on the positive and know the market will shift.  Thanks for the great post.

Nov 19, 2009 11:43 PM
Dan Quinn
The Eric Steart Group of Long & Foster Real Estate - Silver Spring, MD
Dan Quinn

"You'll know the market has recovered when you can confidently re-enable automatic bill pay from your checking account instead of prioritizing which ones get paid this month by how far past due each is."

Beautifully stated Paul.  You are exactly on the money.  Now as to when the market will fully recover I have this to say:



Sorry, I've drawn a blank.

Nov 20, 2009 02:53 AM
Lyn Sims
Schaumburg, IL
Schaumburg Real Estate Agent Retired

Great post.

Nov 20, 2009 03:33 AM
Jeff L.

I am a mortgage broker in Chicago, own 3 places in the Phoenix area. 2 are high rise condos in a building in BK for the developer, not the owners: however, 55% of the tenants are hanging on.  My concern is will they recover in 5-7 years.  I paid 30% less than 80% of them who wound up closing in early 08. I bought in early 05 and they were finished in late 07.  That's why 45% never closed.  I can't walk away because they are investment properties and the lenders could take my other money so I am stuck but grateful to make the negative 20K cash flow on the 3 of them each year.  To walk away, would ruin my credit and I would have to pay the money anyhow since I have it.  No forgiveness for investors.  Investors that are BK don't need to worry because they have nothing left to worry about.

5/1 is nothing to fear.  Most probably have 4-4.5% and the current margin for most is 2.5 and the 1 year libor index is under 2.  My guess is they will reset between 4.25-5.25 for most, so that shouldn't hurt anyone.  And since they are arms not ballons, they need not worry about refianancing and not being able to qualify.  The high reset arm loans are done.  They were all 2/1 arms taken out in 05,06 and early 07..  Those people have left the keys on the counter last yearand in the first half of 2009.

Nov 21, 2009 07:38 AM
Joy Carter & Jeff Booker Brother and Sister Team
Keller Williams Parkland/Coral Springs Realty-GreatFloridaHomes Team - Coral Springs, FL
Trust Your Family's Move To Our Expertise!

Not that real estate is wonderful here in southeast Florida but it is still local.  We are selling but no where near the pace of the last few years.

It is a constant fight to stay ahead of the negative and depressing news and sometimes facts.

I REFUSE to Give in or GIVE UP!  Joy

Nov 22, 2009 02:47 AM
Jeff Lezak

Don't give up.  I entered the mortgage biz in 1993 after 11 years w/ a corporation and made 40% what I had made which wasn't that great to begin with.  In 1998 I made 4X what the corp. paid me and in 02 and 03 I made 7X.  Back in the dumps worse than ever in 06 and 07 and now as bad as it is 2x of 06 and 07.

Plus I invested the huge money I had made in Az. real estate in 04 and 05 and the stock market.  Anyhow, I don't have as much money left from those huge years(partly do to my fear) but I still have the same life, wife, etc. and I enjoy being a mortgage banker even though the government has made it very difficult.  Hang in there.


Nov 22, 2009 03:25 AM
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

Hi Paul!  Very insightful and thought-provoking.  Like Diane, I've enjoyed reading the commentary and do wish that the consumer felt more comfortable commenting as well.  Our market is in the upward swing with a decreasing, increasing sales and flat sales prices--however, it's a SLOW upward tick!  I hope for all of us to stop dreading the walk to the mailbox and giving it the old, 'which one do we cover this week.'  Best of luck to you, Paul--you SO deserve it!

Nov 22, 2009 12:46 PM
Judy Greenberg
Compass - Long Grove, IL
Compass- Long Grove -Buffalo Grove

Paul, what a great post.  As to #56, I am a realtor in the North and Northwest suburbs of Chicago, and you hit the nail on the head! 

There is a shortage of homes, - I am currently looking for a home in the $400,000's that is decent for my client and having a hard time finding one.  Other than short sales, the inventory is low and my client doesn't want to gamble on a short sale since he is moving here and needs a place to live.

As to prices, they will eventually go up, sooner than later for the lower priced homes, but the higher priced homes are still unfortunately going down.


Nov 22, 2009 03:36 PM
Gail Robinson
William Raveis Real Estate - Southport, CT
CRS, GRI, e-PRO Fairfield County, CT

Paul - We may not know where home prices are headed, but we sure know that interest rates will be moving up and the tax credits are only available until spring.  If you are buying a home to live in and don't plan to move for the next 7-8 years, then whether home prices move up or down in the short-term shouldn't matter.  Get a 30 year mortgage below 5%, take the tax credit, and enjoy owning your own home.

Nov 22, 2009 04:05 PM

I am a consumer who just signed an offer to purchase.  I am nervous about the market and whether my offer price was too high based on predicted market fluctuations, so of course I googled "housing market predictions" and fell across this blog.  I like it; it's empowering.

My family was as affected by this economy as anyone:  I lost my job in February 2009.  By September, I was back to work and my family's household income is higher now than it was earlier this year.  We carry very little debt and we are optimistic about our future.  In our town, inventory is scarce and good homes are moving quickly.  We are happy that we qualify for the tax credit, and glad to see rates so low.  We had not one problem securing financing, and in fact were surprised to hear lenders still offering us mortgages well beyond our means (which we will not take, of course!). 

All things considered... For MY family, the RE market has never been better. 


Nov 23, 2009 12:13 PM
Gail Robinson
William Raveis Real Estate - Southport, CT
CRS, GRI, e-PRO Fairfield County, CT

Christina - Welcome to ActiveRain and thank you for commenting.  I hope you and your family enjoy your new home.

Nov 23, 2009 04:31 PM
Paul Slaybaugh
Realty Executives - Scottsdale, AZ
Scottsdale, AZ Real Estate

Thank you for your comment, Christina.  It sounds like you made an informed financial and personal choice.  I hear the same sentiments often.  Many clients of mine know there are good potential deals available to them, but hope to build in as much cushion as possible (by purchasing something below even today's value) to insulate them from further erosion in value.  That is never an easy task, but always the objective.  Like most any commodity, you really make your money on the purchase, not the ultimate sale.  Those matters aside, you made a choice to tackle home ownership at a time in which it is personally appropriate and feasible.  That the market at large is currently conducive to securing a good value is just the icing on the cake.  Best of luck with your new home and thanks again for lending your perspective to the thread.

Nov 24, 2009 01:56 AM
Russell Lewis
Realty Austin, Austin Texas Real Estate - Austin, TX

Hey man...just dropped by to say i have enjoyed the daylights out of your cryptically funny and sometimes insanely absurd comments on facebook. Thanks for the laffs!

Hope you and family have a great Thanksgiving!

Nov 24, 2009 10:23 AM
William Johnson
Retired - La Jolla, CA
Retired Real Estate Professional

Hi Paul, A very good expose. And of course " the crystal balls all over the country are cloudy". If I were to speculate and we love that temptation, the indicators this time are not only not clear but in some ways defy logic. We see sales and markets improving in the number of sales while the economy in those locations may defy the improvement. We ignore most of the empirical data that indicates that so many are upside down in loan to value. I have the belief that we are in for a long ride over new yet to be discovered territory. But I like your take of turning the question back to the consumer to answer from their perspective. Their perspective and action is the only one that can keep us professionals  engaged in the market.

Nov 24, 2009 05:40 PM
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

Hi Paul!  I love hearing a consumer's point of view and how refreshing to hear the one by Christina!  Things have turned around for her family and staying debt-free (with the exception, of course of a mortgage), is a very smart way to live.  It makes times like those she experienced a bit more manageable.

Have a great week...

Nov 29, 2009 12:08 PM
Scottsdale Real Estate

Thanks for the information you have provided here i love the post ......awesome guys.......

Mar 19, 2010 12:17 AM