Timing the bottom of the housing market. You might as well go to Vegas. The odds there are probably as good or better than one’s chances to “time” the bottom of the real estate market.
When will we reach “bottom”? Finding a consistent definition of “bottom” is a challenge in its own right. Who knows?
A few thoughts on Charlottesville’s market:
– Existing inventory needs to be reduced.
– Housing starts need to slow down (they are).
– Mortgage rates need to stay low (they are).
– A builder or two may need to merge with another.
– Buyers, sellers, Realtors, et. al. need to look beyond the headlines.
Any way you look at the above numbers, sales are down … but prices, year-over-year, are up.*
Sales in Charlottesville/Albemarle:
– Were down in September 22%.
– Year over year, cumulative sales were down 20%.
The number of new listings put on the market in September was down 24%. This is a great indicator. Sales down 22%, but new listings were down almost by the same amount – could this be the sign that people are looking for? (We’ll know in 18 months)
Bank of America is exiting the wholesale mortgage business.
Nourel Roubini is among the greatest advocates for the “sky is falling” perspective (backed by fundamentals)
The bubble blog describes the “crash”
But … when it all shakes out, one thing will remain the same – Real Estate Is LOCAL.
When an agency like NAR or HUD issues a press release about real estate, it does so with a spreadsheet and a bevy of easy-to-regurgitate statistics. All reporters have to do, therefore, is cite the statistics, talk to a few industry people, and spit out the national story. That’s one reason why we see so much coverage.
But real estate is not a national story, folks. It’s highly, highly local.
To beat the point home, when you buy your next home, it won’t be a home that exists in all 50 states. It will be a home that exists in one state, in one town, in one neighborhood, on one street and that has its own character and economics.
And that’s why, in many if not most cases, reading your local real estate blogs will frequently bring better, more applicable analysis.
*Days on Market clearly is inaccurate, and I don’t know why.
Update 10/28/2007: Bumped because of the comments.