Hate is an awful word which is not in my vocabulary anymore. We all have the right to an opinion and as a real estate professional I stick with my positon that in my area, it IS the right time to buy if one has a good down payment and can afford the payments. If one cannot say anything nice, then do not say anything!

hate how realtors say whatever in the face of whatever and without regard to those whom their words may hurt, as their conclusion is always the same: NOW is the time to buy, delay could well hurt you.
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Jfins you're generalizing.

Klea, the buyers market will last until it ends. None of us will know some time after then switch happens. But as long as there is very high inventory, it probably hasn't.

I hate how realtors say whatever in the face of whatever and without regard to those whom their words may hurt, as their conclusion is always the same: NOW is the time to buy, delay could well hurt you. Yeah, no kidding. So could buying a million dollar home and, let's see: per Trulia, you would have lost $66k this month: $13,400 this week. The 4-BR houses San Jose are still around 20% over 5/04 (when I moved) and at current trends, have a long way to come down (like 60% from '97 rates).

Think about it.

Real Eastate is LOCAl. I'm not sure about California, but here in Miami, prices (IMO) have already reached the lowest levels. Every neighborhood and building is unique; some buildings and neighborhooods have hardly been adversly affected, while others continue a downward spiral.

As a Realtor in this profession for 25 years, I attend and listen to many economists on this subject. Of course we do not have a crystal ball. It depends on the city. For some cities in the bay area the bubble has not bursted. For other cities, buyers are able to negotiate prices, the areas that have an influx of REO and short sale listings are doing well because the banks will, for the most part, not take less than listed price. The public believes the media that the banks just want to get rid of their listings. This is far from the truth. The banks do not want to give away their properties as they are already selling them at a 30-50% loss. Believe me when I say now is the time to buy! Homes are selling at an all time low price right now and the interest rates are still low. One day the interest rates will rise and it will become more difficult to qualify for a loan even if the home prices remain low. The economists,I believe this too, are saying the market will start to creep up in late 2009 or early 2010.

This post is from August 2007. You were probably worried about missing the bottom, right? Are you still worried. I wouldn't be. When it hits bottom, it will be there for a long, long time. Nobody really can predict the bottom, but we can guess. I'm guessing 2012-2013. Good luck

I'm sorry Ed, but the last Housing crash in the mid-eighties was caused by the Government pulling the Tax-incentives from real estate followed up by the Savings and Loan crash of the early 90's. Trying to predict the market from History is imposible.

"If past history was all there was to the game, the richest people would be librarians" Warren Buffet


Real Estate is Very Location Specific. You can shout out #'s such as "In my area homes have dropped $100,000 - $200,000 " Well in Cupertino prices have appreciated by as much as 8% year over year. In South San Jose the prices have dropped nearly 30% yet in the last month sales #'s have increased to '04 levels indicating that foreclosures and short sales are being absorbed.

If you're trying to time the market you're more than likely to wind up frustrated and confused. Warren Buffet once said “I have no idea on timing. It's far easier to tell what will happen than when it will happen"
We all know the market will come back but to say when is impossible.

I know there are incredible opportunities for investors right now and home buyers need to figure out what it is they want rather than trying to time the market.

I apologize if this is long but i wrote it and had to piece it together backwards so please read the first post then work your way up. Last time ill ramble sorry.

The economy is strong if someone can afford a home with a 30 year fixed they should buy. But because of the media they are scared. Investors are eating up deals. Try to find a short sale on the MLS in good areas. Maybe 1. And it was probably a real estate professionals personal residence. Find a short sale belonging to an engineer or doctor. You don’t because rates are so low, there are ways out. Back in the other bubbles there were no ways out.

You would think that would affect Wall Street or that the 30 year fixed rate would be rising to new highs. Nope. Why? Wall street and the S&P are hitting all time highs this week, and these losses have all been but forgotten after being reported last week.

Does the media talk about this? They talk about foreclosures and falling market because of the subprime. Well this also needs to be addressed as does the current default rates and foreclosures. There is a problem with adjustable, and defaults. People are losing there houses and short selling there homes. But like the current trend in the global economy the market keeps moving forward never looking back. So is this a real estate issue or an economic issue.

Ok I know I know the subprime right. It’s the cause of all this. If anyone picked up the latest fortune special about the market crisis you would have read some interesting articles. For one this is no longer our problem, meaning the USA. This is a global economy now more than ever, not like other bubble markets. Another new wrinkle economists are trying to understand. The world bought all those exotic mortgages on the secondary market. Have you ever seen banks post billions dollar losses like its in fashion, UBS 3.4 billion, Citi 1.3 billion, deutsche bank 3.12 billion, Merill Lynch 5.5 billion dollars loss, In all, at least nine major banks have warned or announced they will take write-downs, set aside funds or take charges of roughly $21.8 billion related to subprime lending

One major reason why this bubble is different than any other bubble that we have seen is that for the first time, rates are actually still at 35 year lows. In those 35 years rates were never this low. During prior bubbles and adjustments, rates where extremely higher. We have an inventory issue not a affordability issue. People can afford a house with a 30 year fixed right now but the media tells them the market is falling. This was not the case in the other previous bubbles

How could homes sales drop in the last year an avg. of -12.8%, yet overall sales price in that same year shows a positive gain of .2% of overall median sales price. Is that a declining market, or just a slow market for realtors? Ok that’s a year lets do a month to see a more immediate effect. Since last month sales have dropped -4.3% and sales median price dropped -1.8%. Nowhere near the fire sale media mentality.

I think the question is far more complex and could be answered differently depending upon each individual market. For the silicon valley in general there are areas that are just as hot as they ever were. And some suffering huge drops in value. How Long? I don’t think anyone knows period, or if there will even be a long-term effect like the other bubbles of past.

The Media has so many people negatively fixed upon the subprime mess and what the fallout will be that people have failed to question the media’s knowledge of what is happening. So many consumers and real estate professionals have let them control there reality. Instead of factual data media pushes its idea of a story. There are pros and cons to the medias take on the current bubble. For one it should be recognized and I am glad they have brought it into the front. There hasn’t been much positive stories, or stories about the flipside of what is going on.

For the first time ever before we are dealing with issues that none of us have ever encountered before. From 5 yrs to 50 yrs in the business. There are issues extremely different than any bubble before. For instance there are paradoxes that just don’t make sense, and economist are adjusting to figure out why things just aren’t the way they thought they would be.

Jack wrote: DO NOT let a real estate agent or broker tell you when to buy.

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LOL! If only I had the power to "tell" people when to buy. :)

The economists in my state have been very accurate in the past. Nobody has a crystal ball. In the Bay Area some sellers continue to receive multiple offers. We may all be surprised as to what happens next year. Especially buyers. I personally want my buyers to be able to negotiate price and terms. I do not like a multiple offer situation.

Visit the web sight given by Trulia Roger. The information given is correct on the last housing crash. At the beginning of the burst Real Estate Professionals will always tell you it is a buyers market and try to sell you property for 5% less. In the last crash house prices dropped 40% in San Diego within a year of this point. This crash is going to be much worse.

Visit the web site given by Trulia Roger. The information given is correct on the last housing crash. At the beginning of the burst Real Estate Professionals will always tell you it is a buyers market and try to sell you property for 5% less. In the last crash house prices dropped 40% in San Diego within a year of this point. This crash is going to be much worse. DO NOT let a real estate agent or broker tell you when to buy. They are not economic experts. All you will get is a catch phrase.

That really depends on the area. Strong areas like Los Altos, Mountain View and Palo Alto are not buyer's markets. As you move into areas where the income levels are lower you are getting into the territories hardest hit by the mortgage issue. Those areas will continue to be slow as the loan products that put many of the past buyers into homes have gone away. They no longer exist so your buyer base is less. Someone buying now could do great. In those areas I would not be surprised that it lasted until 2009. Get to know your area and track the stats for awhile that will give you an indication of how that specific market is doing.

Just recently economists have stated that prices in my area (East Bay) will increase next year. I feel it is a great opportunity for buyers right now.

Silicon Valley is bucking the national real estate trend. The companies radiating out of Sunnyvale are hiring and that will continue for a long time. Also, each new hire comes with a large salary which impacts the real estate market. If you are looking at Willow Glen - which is a beautiful piece of San Jose - take these next 6 months as a great opportunity to get in to the market. Things will change for the better (for sellers in sought after neighborhoods) by the Spring. I won't say the same for less desired neighborhoods in San Jose.

Ed, If the buyers market ends in Dec, 2010, I'll be hitting you up for lunch! LOL. Glad you took the time to expand and explain your rationale. It has been much appreciated by all. Deborah

Ed, you absolutely rock!!!

I am happy for the adjustment and now buyers who have the money can purchase a home and negotiate a bit.

Great post Ed Monaghan! I realize there are pockets of the country that are not as affected as others, some nearby to me. What is truly scary is that I hear agents take a "it can't happen here" attitude, because we haven't been hard hit yet. The reason is because sellers still have their heads in the clouds and because the majority of people in the country just do not read news or watch TV or surf the internet in a constructive manner and don't realize how bad it is. I hope I never see another 3 bedroom not updated 50s or 60s ranch for over 500,000 with a seller moaning that no one came to see it.

Hi Ed,
Thank you for your quick response!!
Deborah

Hi Deborah,

Well lets see... Most of what I see is that 2009 is the golden number if you listen to what the do gooder government types are predicting. I have been through five of these upsy-downsy things since 1975. Most of the sellers markets lasted two to two and one half years at best. This last one lasted nearly four years. Totally incredible. The market was artificially inflated by supply and demnd as it always has been but this one drug out longer than the norm.

The exotic loans allowed the market to catapult to levels like we have not seen before and now we're going to have to pay the price for optimism. We should have never been here to begin with. I am not complaining, you need to understand this, but I could see two years ago that this was coming to a head and so could the Feds. But they just let it slide like we did. Go with the flow.

In 1989, 1990 and 1991 we saw this same market. I participated in over 150 short sale and foreclosure transactions. Then, it was not because of the exotic "Pick-A-Pay" mortgages and interest only loans or the sub-prime sector that would allow you to get a mortgage by simply "fogging a mirror." We should have never been here in the first place but again, I am not complaining. I prospered like everyone else did because of this insanity and I sold gazallions of homes and made gazillions of mortgages.

Fortunately, I am fairly conservative and I moved most of my clients out of the adjustables and "get me by loans" and put them into fixed loans when things started to take a dump.

Everything the Feds are doing today with the emergency discount rate dump, in my opinion, is really too little too late. And they will have to drop it even lower to stimulate borrowing power. Adjustable rate mortgages that were at 4.2% just 24 months ago are now at 7.5%. Correct me if I am wrong but 30 year fixed mortgages are now the only game in town... FOR THE FIRST TIME IN 14 YEARS!

Look at the short term adjustables. Alt-A loans are quickly becoming a thing of the past. A few sub-prime lenders are still touting their goods but that's really a joke because they are not performing.

This is not doom and gloom. I think this adjustment is a good thing. Once the money situation stabilizes, the market will get back to somewhat normal. But that won't happen for a while because the Feds are somewhat limited as to what they can do because government money unfortunately is earmarked for other more necessary purposes. For the time being anyway.

I am not complaining about that either, I am a Viet Nam Veteran. But our market will be efected until the money supply is re-directed to the US economy and I do not see that happening until 2010.

Elections are coming up... we have to go through a transition period and I don't see money being injected back into the economy until 2011.

In the mean time... it is an absolutely incredible time in real estate if you are a buyer. I mean a real buyer with cashola. Home prices in my area have dropped $100,000 - $200,000 and the luxury homes are pretty much at a stand still... the world is your oyster with these homes. There are so many good deals to be had out there. Buy them now and hold them. I bought two myself.

Do you realize what is happening with rents right now on multiple unit properties?!? This market is absolutely smoking. If you are not working 1 - 4 unit properties, or more, you should start. Investors are in the market and they are buying. This year, for me, is on track to be one of the best in my 28 year carreer.

The foreclosure market is absolutely on fire. You need to get a piece of it. I do not like to work this hard but I am working more hours now than I did two years ago. And I am getting too old for this.

I could go on and on but it's late and I am going to get off of my soapbox.

I hope this at least gave you one persons view of the current market conditions. ANd if I miss February 2011 by a month or two, I'll buy you lunch.

I hope this was helpful

Love,

Ed

Ed,
Can you expand upon why you targeted February 2011? Tx! Deborah

Absolutely until February of 2011. That is my prediction.

Good question.....I think we are going through a bit of a cleanse right now. The market will hold till the election and then my crystal ball becomes a bit cloudy. As the short sales and foreclosures increase it will deepen our market place.

We do not have a crystal ball. Once I listen to a couple economists whom I know are very accurate, I will have a better idea of our future market.

So much depends on the area you're looking in; in the majority of markets, it's likely to be '09. FYI, this is what we'd *normally* expect for any market in our usual 10-year cycle.

However, in the *best* areas of Silicon Valley, which is where you're looking, it's different. As long as there are more buyers than home inventory, prices will go up; when the inventory exceeds number of buyers, prices will go down, when incoming inventory & buyer demand is steady, so is the market.

About 24 months depending on what area of the country you are talking about. ARM refinancing crisis will be the next big blow over the next 12 months. Then those foreclosure will take about another 12 months to clear from inventory. Builders are contracting and building less specs. Lenders and secondary markets are running scared. So it will take some time to work this out of the system. Once demand outpaces the supply the run up will start to happen again.

3 years, judging by previous housing crashes.

Two weeks tops.....OK I wish. Fed cuts rate .50 in the next three months. Comes up with a new plan for the 750 billion in loans that will reset. Raise FHA( Now the new sub-prime) to 417K.
Market begins to transition in 18 months.
Hey it can happen.
Two weeks ago CNBC Cramer pulled chicken little out of his %&$, and said the sky is falling.

That's a good question and what follows is just my opinion. I believe that the market will remain favorable for at least another two years as the experts expect foreclosure sales to increase for the next two years and foreclosures have an adverse effect on values. How favorable the market will be for buyers will also depend on what will happen with the lending industry. Loan underwriting criteria have become much stricter lately and many buyers who'd have been able to buy a house last year, are out of luck now. I think seller will be asked again to help out with closing costs and some sellers may even carry a second just to be able to sell their houses. Essentially, we are going back to a more normal market and unfortunately we also have to deal with a wave of foreclosures which is not necessarily normal. The real estate market has traditionally gone up and done, but not every down market has been accompanied by a flood of foreclosures. We'll get through this and in some way I think it was time for buyers to get a break.