Housing Slump Over?

Question

I just heard on the news (Fox 5) that the housing sale slump is over. Supposedly, Nov and Dec last year was showing increases in sales and that they expect sales to pickup again.

Is this true? What do you think?

The news I heard was for the Washington DC Metro area.

Another reason I asked this question was to determine if now would be a good time to buy my first house? Would it be best to wait about 1yr or to buy now?

Answer 1

I guess it might be regional, but I heard this too (yesterday) and I was surprised as well. If it is over, that was a fast recession. I have my doubts, though. I think that it might have just been a blip.

Answer 2

The Nov. and Dec. numbers show that the unit sales are up. Not that the prices have changed. Just that the unit sales are up.

2 months does not confirm a trend one way or the other.

The general impression is that the trend is for flat prices but a better balance between sellers and buyers in 2007.

The regional differences are pretty stark. Some areas of the US never saw a boom so they do not need to correct for prices to be more evenly balance. Some coastal areas and certain cities had many speculators and 2nd home buyers who clearly have pulled back. Hence those markets saw price falls while the US average was a slight price increase for all of 2006.

In any market there are bargains. If you bag a bargain then it will not matter much what average prices do in 2007.

I have been investing in RE since 1983. 2006's market has to be viewed in the context of 5 years of record breaking sales and sale prices. 2000-2005 was the abnormal period. Do not assume that the market will return to the levels of the 5 year period.

Answer 3

Fox must be hurting for ratings- they've gone into the Real Estate business! :) Nah- not yet... Wait another 6 months. The market's still pretty soft... Nov. & Dec. last year was unusually warm across the country- so sales ticked up alittle. Now that it's turned more like winter, - the housing market will flatten out again (probably until the country gets some good news from overseas- which won't be any time soon...). For now, invest in bullets.

Answer 4

If my gut is correct many localities are in for big corrections. You'll notice that buyers continue to buy but but in my area for example builders are offering more and more incentives so although the prices have not dropped there is another 20-30k that the builder gave away to sell the house at the same price they did last year. Another tactic to stretch out this run up is that the 40% of buyers from 2005 and large numbers from previous years are starting to rent out the properties they have because they are upside down and cannot flip the house for a profit. The only problem is people are starting to realize that the hous the bought with a 2500 dollar mortgage can only be rented for 1700 dollars and their economic situation is getting worse and worse and the values will not come up any time soon. Atleast not enough for them to sell and not owe 40-50k because they bought in the peak and overpayed out of shear ignorance. Now the builders are building even smaller homes that are cheaply built to suck out the last of the buyers who for some reason still think real estate will rise dramatically sometime soon. Also, dont forget the ARMs that are out there. A huge percentage are adjusting as we speak and will adjust withtin the next year. This is just a big mess and there are too many factors that show the run up in real estate went overboard and that we will pay dearly. It may sound like I am being chicken little but in actuality I am a very optimistic person yet I still believe this because I can see it in all too clearly. Also, to those of you who may say our economy is going great blah blah blah, it may be in your opinion(that's another arguement i.e. inflation is creeping) but even if you think that you must agree that the real estate run up is on edge and local economic hardships could pop any bubble that has built up. Face it we got in over our heads this time!

Answer 5

Not over just yet..what is helping the housing economy is that interest rates have not moved since September so First Time Homebuyer's and those wanting a new home are still able to reach that goal of homeownership. Also with many amateur investor's drowing in Option-Arm and Arm loans they are getting what they can for someone to purchase there home. You may notice as well that since rates are decent some Homebuilder's are giving out great incentives. See a good push unless the Financial Guru decides to raise the rate.

Answer 6

I know it sounds weird, but in my target market (Orange County, CA), I've seen an increase in prices and a decrease in inventory in the last 3 weeks. It's as if everyone decided to buy a home for the new year and took all the cheap ones off the market.

It will be interesting to see how the next two months go.

Regards

Answer 7

The housing slup is starting to be over but the market is still slow. If you are selling your house then be ready to wait and be patient. If you are selling your house price it right and you will get someone to buy it. Now if you are buying a house you can get some real good prices. Some builders built a lot of houses with the thought of they will sell fast and they are not so they are throwing some good stuff to people to buy the houses. Go to realtor.com and look there. I wish you the best of luck.

Answer 8

Increasing sales does not necessarily mean increasing prices. I would bet that sales will increase slightly over the near term but it will be 6 months to a year before prices start rising.

Answer 9

There was an article in the Reno, NV paper that said they expect the slump to be over by May based on projections.

I sure hope so-- we want to move to a bigger home down the street!

Answer 10

It is not over in NE Florida. We still have so much inventory and few buyers. Everyone is sitting on the sidelines.

I think another 12-18 months before things get better.