Housing Prices Drop, Affordibility Improves, Buyers Return, Media Notices
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We need to teach economics better in the country.
Lets do the formula that we all know.
- Speculators drive the housing market up.
- Typical buyers are priced out.
- Some still buy.
- Market hits the top, speculators bail out.
- Prices drop hurting late buyers.
- Foreclosures and inventory make prices drop fast and hard.
- Homes become affordable to typical buyers.
- Buyers return to market.
- Real Estate market finds bottom and comes back up.
Either I am damn smart to be the only one to see this, and I know I am not, or the media is just a herd that is chasing the story of the day.
Check out these headlines.
- Housing affordability on the rise
Pasadena Star-News Homes are biggest bargain since 2004 CNNMoney.com First-time buyers find silver lining in foreclosure cloud Los Angeles Daily News
The story of the day is that housing is again a deal, and affordable, and makes sense to buy or at least look.
So what does this mean to you, the real estate agent?
Expect to see a surge in first time homebuyers coming to look.
These folks may not be ready to buy yet, but they are interested and eager. They have been married a couple of years living in a rental waiting to live the American Dream of owning a house.
This is the demand I was talking about that has been percolating. These folks did not want to buy into a down market but at the first sign of a bounce, even if it is a dead cat bounce, they will be looking.
And some will even be buying.
So get your buyers agent hat on, I bet you will be very busy showing homes in the next month as now the media has recognized that housing is affordable again.
PS This is the bottom I expected after the elections were over. With Obama ahead of Hillary now the media probably thinks he is safe and it is okay to talk up the economy.
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Comment by Joe P on 21 May 2008:
“Dead Cat Bounce” perhaps. I think there is a little ways to go but things look to have slowed. There are still regions where pricing is still completely out of line and should continue to experience a decline.
Comment by Shell Smith on 21 May 2008:
I totally agree with Joe P. I think that areas I am interested in are out of control. I have been looking for real estate in Florida for example, and still think a decline is in order.
Comment by Kirk on 21 May 2008:
If rates increase, real estate is in for a hell of a ride down. Homes might be somewhat affordable at these historically low rates. At higher rates, homes are grossly overvalued.
Comment by Joe P on 22 May 2008:
Kirk, well said. If we raise interest rates over the next 3 months would that accelerate a needed decline in prices or completely collapse the mess?
Comment by Seanster on 3 October 2008:
It’s a good thing that we’re back on track. “even if it is a dead cat bounce”, we still have to be thankful for the resurgence.
Comment by Murfreesboro Townhomes For Rent on 14 October 2008:
Its true that prices are down and its a buyers market but if the lending community does not change the way they operate things will only get worse. I still see companies offering 0 down which in my opinion is stupid and just asking for trouble, if you can not afford 10 to 20% down you should not consider buying a home.