Turn Back the Pages of Time

By
Real Estate Agent with Fredericksburg Realty, Inc.

OK, the housing market in the USA is in a major hurt.  OK, sales prices continue to spiral down.  OK, the government is stepping in to assist homeowners who are staring foreclosure in the eye.  OK, new home starts are down.

The decline of the market is something that is reality!

Why aren't buyers buying?  The values appear to be there.  Interest rates are good.  Blame it on the economy?  Unemployment is up but not in statistically significant numbers.

Most that I talk to think that buyers are waiting for the market to bottom.  I tend to agree with that analysis.

Question - when it bottoms where will it be.  Some predict the 2006 prices.  Others predict 2004.  Some predictCrystal Ball even earlier.

Here is your chance gurus of real estate.  When the market bottoms, at which year's prices will it be.  Let me be the first to make a prediction - 2004.

Comments (11)

Jan Wood
None - Gallatin, TN

Ed:  IMHO the market is not at the bottom because the media, which is controlled by Wall Street, et al, controls when the bottom will be.  When the media turns, the market turns.  Buyers will get off the fence at that time.   There are many good buys at this time, but the rich are the ones who are going to get the best deals and they are the ones buying in bulk right now.  They've got the cash and don't have to get a loan.  The other plain old consumers are too fearful.  Like I said, just my humble opinion.

Aug 01, 2008 03:50 AM
Mike Saunders
Lanier Partners - Athens, GA

Ed - we have a strange situation here. I spend 80% of my time working 2 counties. In one sales volume is down from Jan 1 - today by about 20%. DOM has increased by 2%. However both 12 month sliding median and average price has gone up by about 4%. In the other county, while DOM has increased by 14%, sales volume, 12 month sliding median and average prices have remained level.

I do agree that buyers are waiting for the media to say the market has bottomed but most of them don't know that real estate is local. The savvy ones are getting deals.

Aug 01, 2008 04:00 AM
Ed DeChristopher
Fredericksburg Realty, Inc. - Fredericksburg, VA
CRS Fredericksburg VA

Jan - The media controls what most of us think doesn't it.  What is reported is what editors think should be.  It is up to practitioners like us to "tell it like it is."  Hopefully, that is the case but I do not think it always is.  My friend, Jim Crawford, is often chided because he takes that road.  Unfortunate.  You are 100% correct in your comment about the more fortunate being able to purchase a home (investment) without a taking a loan.  We, read the country, will be much better off when consumer confidence improves.  That time cannot come soon enough for me!

Aug 02, 2008 02:09 AM
Ed DeChristopher
Fredericksburg Realty, Inc. - Fredericksburg, VA
CRS Fredericksburg VA

Mike - Wow, a comment from Greece!  Only kidding Mike.  Educate the consumer is part of our business and it looks like you are doing a pretty good job of doing that.  Unfortunately, we as a group (real estate agents/brokers) do not seek out the media to make comments on our local situation.  Maybe that should be the focus of those of us here on this forum.  What think you?

Aug 02, 2008 02:13 AM
Ed DeChristopher
Fredericksburg Realty, Inc. - Fredericksburg, VA
CRS Fredericksburg VA

Jan and Mike - How about your predictions?  Go ahead, go out on a limb!

Aug 02, 2008 02:22 AM
Jan Wood
None - Gallatin, TN

Ed:  I think that Florida has pretty much hit bottom... great time to buy.

California may decline somewhat more and won't hit bottom until mid to late 2009. 

Until the media is through with Californina, I can't help but think that their bad situation will spill over into the rest of the nation.

I think that international investors will be snatching up most of Florida pretty soon with their money buying so much more than our's right now.  Don't like that fact too much, but I'm trying to face realty. 

In Tennessee we have ridden the storm out pretty well; however, we have seen a slowdown and housing predictors are saying we will see a 4% decline in by year end.

Consumer confidence is key... I don't see much, do you?  We'll have to wait and see how much the bailout helps the consumer and not just the financial institutions.  Time is not on our side.

 

Aug 02, 2008 04:36 AM
Ed DeChristopher
Fredericksburg Realty, Inc. - Fredericksburg, VA
CRS Fredericksburg VA

Jan - Great to see your predictions Jan.  Foreign investors appear to be bailing out on homes in our market (if you can tell anything by the names and addresses of them).  Nonetheless, there has not been much foreign investment here.  Guess it is not as much of a vacation centered area as other places.

Unfortunately, the consumer confidence is still not strong.  Perhaps something (election?) will stimulate it!

Aug 31, 2008 09:37 PM
Jim Crawford
Maximum One Executive REALTORS® - Atlanta, GA
Jim Crawford Atlanta Best Listing Agents & REALTOR

I see the sales numbers in Atlanta rolling back to the number of units sold back to the late 1990's already.  I think prices will settle in eventually to prices seen in mid 2003I also expect the bottom to be in the last quarter of 2009.   There is just too much stuff we have to get through first.

Sep 01, 2008 01:56 AM
Ed DeChristopher
Fredericksburg Realty, Inc. - Fredericksburg, VA
CRS Fredericksburg VA

Jim - Finally, got someone to predict what I was looking for.  Prices to the mid 2003's and bottoming in later part of 2009.  Good prognostication my friend.  Think you are very close

Sep 01, 2008 07:17 AM
Anonymous
Potential Buyer

Great Values exist but even if there is equity in buyer's current residence, they can't tap into the same to purchase the next residence.  Many are cautious in buying because their assumptions on affordability are based upon using the equity in their current RE, which may take months if not year to realize.  Two mortgages, one on current home, which presumeably is affordable based upon desire to upgrade, and second on new residence, which presumably would be affordable if was sole housing expense, coupled together are too great and create a great risk.  Its the constant catch-22, made worse by average time on market increases for existing homes.

Sep 03, 2008 02:54 AM
#10
Ed DeChristopher
Fredericksburg Realty, Inc. - Fredericksburg, VA
CRS Fredericksburg VA

Potential Buyer - You are 100% correct.  When the market stabilizes, and I am sure it will, you are going to be able to purchase a home at market value and sell your home at market value.  That is how it has been and should be.  We saw too much appreciation very quickly; hence the phenomenon described as "the balloon."  Stick with it!

Sep 09, 2008 01:24 AM