I’ve said for years that we won’t know whether the Charlottesville real estate market has hit bottom until we have 12-18 months of hindsight. We’re seeing signs – somewhat consistent signs that we might be scraping the bottom of the real estate market – and likely will for the next few years, in my opinion.
This note from a client says it well -
“Just a little story I thought you might be interested in knowing. My neighbor at — recently put his house up for sale. It was on the market a little over a week I think and is now under contract. He bought at the height of the market for 325k and I believe he accepted an offer for 320K. His house is assessed at 185K and is half the size of my place next door. I don’t know what the bottom looks like, but I am thinking it looks a lot like this. Charlottesville is indeed a different place.”
So if you look at the data, it doesn’t jump out at you that we’ve reached the turning point. Now, we may have, but I think that seasonality seems to be getting stronger, and that’s another contender.
CONAN: So how long do you think you would want to wait before you saw enough numbers to make a decision?
SHILLER: Well, I used to forecast home prices, and I thought a year – once you have a year – this is what I used to think, and whether it’s still true, but … But once you have a year of solid price increases, you are probably off to the races for some years. So yeah, but we’re not into it that long yet.
I think we might be getting there. Maybe. I’ll tell you definitively in 18 months.
But for those who have been waiting to buy and waiting to sell, there’s more clarity than ever. The 30 year fixed rate mortgage is currently at 3.6% (Aug. 15). Buyers who have waited for years and are well-cushioned financially aren’t looking at a house as an investment but as a home. For those with stable jobs and a 7-10 year event horizon plus a capacity to absorb price wobbles, buying looks attractive.