Is housing going to keep sliding or make a comeback???

Question

I Live in MT and things have cooled down a bit there are more houses on the market and tons of lots for sale. Just curious on what the economist and sellers think the market will do the next few years.

Answer 1

It has cooled down all over this nation. HOusing and energy costs have been rising at double digit rates, while incomes have raised in the 2-3% range. Many people and lenders have inflated the prices and made substandard loans and this is all coming to fruition now, not just in the subprime but in the regular market, as with the inflated rising of prices many people treated their homes as an ATM machine, now that interest rates have risen many are finding it is time to pay the piper, and the money cannot be found. My belief is that this market correction will go on for at least another 18 months, the next 12 being the worst. Part of this will stem from the fact that with the tightening of credit less people are eligible to purchase increasing the glut of homes on the market

Answer 2

It's hard to say. I am in Phoenix, AZ and just put my house up for sale. It is nearly new, staged and priced just below comps....and not even one phone call! I am pretty frustrated because i am trying to leave town to go to grad school. So, I have been researching the market and you have your bubble believers who think prices will fall 30% before they bottom out-- they cite inflated values since 2003 vs. not too much gain in income, the bad sub-prime market, the ARMS which are set to reset soon, etc. But, I have also read scholarly articles that state that yes, we are in a bad market right now, but that as inventory is reduces, prices will bottom out and then slowly (not like 2003-2005), prices will appreciate again, like 3-4% a year depending on where you live. I am not familiar with MT, but it is good to look at inventory vs. job and population growth. Obviously, with growth there will be a need for housing. In my area, there is an oversupply, especially with new builds, which are driving prices down. hopefully they will slow down with their building! I think it's a wait and see, but personally, if I were a buyer right now, I would be looking if I were going to stay in the home for awhile. So much inventory to choose from, plus the rates are still low. A minor increase in rates can affect your payments significantly. Check out the real estate section of CNN money online--there are various "expert" opinions posted there.

Answer 3

residential Real Estate sales and prices are always extremely local, even down to the street within the neighborhood.

How is the employment situation in your area? What does it look like in the near future?
If it looks good and like it might get even better then that is good news for real estate.

Is it going to be cheap and easy for some additional homes to be built? (land availability, city and county codes, utility availability, and desirable locations)

If it is sort of land locked then that tends to make real estate prices go up.

In the short term, how many houses are available for sale and how many have sold in last six months. If you have an over supply then prices may not go up in short term at least.