A question came up on CNNMoney.com about timing the market to get the best real estate buy. I thought this response was worthy of posting, so here's the highlight of answer (I added emphasis in bold):
...even assuming you can figure out the ideal time to buy - that is, when prices have hit not only hit a trough but are on the verge of rebounding - by the time you find the house you want, line up the financing and close the deal, the "best" time may have already passed.
That said, given current state of the housing market, you certainly don't need to be in a rush. As my Money Magazine colleague Amanda Gengler pointed out in our December cover story on the outlook for 2008, house prices are already down more than 4 percent from a year ago.
And given the huge inventory of homes already for sale plus the ones likely to come into the market as more homeowners default on their mortgages and go into foreclosure, prices are forecast to tumble another 6 percent or so in 2008.
Perhaps the Bush administration's subprime plan or some other proposal to help borrowers facing foreclosure may be able to limit the damage somewhat. But I don't think anyone believes prices will rebound in a significant way until 2009 at the earliest.
I'll have to agree with Sr. Editor Walter Updegrave on the pricing opinion...seems like prices are still set to fall due to inventory levels and restrictions on the number of qualified buyers (especially considering the restrictions lenders and the secondary market continue to place on new loans). Full article: http://money.cnn.com/2007/12/26/pf/expert/expert.moneymag/index.htm?postversion=2007122711
Here's my prediction for 2008...more and more people will turn to owner-financing. I'll be turning there myself if I want to sell. I can demand better terms and reach a larger audience if I "hold the paper". The downside is the Due on Sale clause in my agreement...but that's a practical consideration. Really, how many lenders will be calling loans due that are being paid on time every month? Most lenders are sitting on more foreclosures than they care to see, so they'll be less likely to call a loan due that's performing 100%.
Having said that, I'd advise my clients of the RISK in selling on a contract for deed, for example, but that risk has to be balanced against the benefit. If you can't sell because you can't find qualified buyers or there's too much competition with such high inventory levels, what do you do? Drop the price until you take a loss...OR risk the Due on Sale clause and sell on a contract for deed or similar tool.
If you want to go that direction, I can help.
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