Call for better stats! Take Care Tami
Prices may not fall as fast or as low as they did over the past few years. I was on a web-interview with B of A short sale exec 2 weeks ago. They said they will be releasing their "shadow inventory" slowly to avoid upsetting the market any further. They too are very aware if they put a massive amount of inventory on the market at once it will cause downward pressure on prices for everyone including the same homes they are trying to sell.
Also, keep in mind sellers who do not have to sell are waiting out the market. In my area sellers are telling me they will only sell when the market starts to rise and if it takes a few more years they are willing to wait it out.
Bottom line: if you are ready to buy and plan to stay for at least 3-5 years or more take advantage of the low rates AND low prices ESPECIALLY if you find a house you really want. No one can predict what the prices will be a year or 2 years from now.
So ask yourself if you can really stay put for that long. Will you need to move because you are transferred by your current employer or a new one? Are you thinking of going back to school?
If you are looking to buy an investment property, then look longer and harder, as there are a lot of good deals and some more to be had in the next couple of years. There are a lot of opportunities to purchase distressed property, rehab it and either sell or hold and rent out.
Let me know if you are interested in more information about either scenario.
Best of luck to you no matter which way you proceed.
Home Sales Maker
In my professional opinion, we are in a recovery now. It is an "L" shaped one, meaning we will not see an increase for some time to come.
As far as prices falling further, I must say that many sellers are losing money now, they will be hard pressed to go down any more.
If you've been watching prices over the summer, you've noticed strong reductions as the gov't credit expired. Low rates are keeping prices from plummeting, but do the math on mortgage payments for a given interest rate, and you'll see how quickly prices will fall if rates rise even 1 to 1.5%. Point is, don't worry about rates rising. If they rise, the house prices will drop accordingly.
Other thing to consider is the shadow inventory - those homes not listed, but waiting in the sidelines to come onto the market. As the banks trickle them out, they'll be priced to sell, putting downward pressure on other sellers. Take a look at good housing blogs like http://mhanson.com/blog and http://www.calculatedriskblog.com/ for more information on this topic. At current levels, it will take years for the foreclosures to clear out (just look at the number of listings on Trulia! wow.)
So my advice is buy if it's the right time for you, but don't worry about waiting and saving up more down payment either. Even when houses bottom out here, prices will probably be flat for a long time while your income goes up. The South Bay is still overvalued historically, not by much now, but it still is. Usually corrections have to go to undervalued, not just fairly valued before things start to recover. This hasn't happened here yet.
I agree with Frank. We are seeing first time home buyers and investors becoming very active in the market. Homes are being purchased and inventories are reducing. You may hear lots of different things about the market. Unfortunately the ones that want to be heard the loudest are always the ones that want their news to be sensational. The reality of the market today is that we are seeing signs of the bottom. I don't know how long it will take to recover, but I don't think we will go down much further.
You can now purchase a home and maintain a similar payment as renting. This is very attractive to both the first time home buyers and the investors. Once they are buying, then the sellers no longer need to reduce the prices.
I also think there is a lot to be said about taking advantage of the low interest rates. Plus the longer you wait, the most tax savings that you will lose.
I think the South Bay is doing very well in some areas and medium in others. It really depends on your price range and neighborhood you are considering.
If you would like more information, please feel free to contact me.
Be careful you are falling into a familiar trap. One that has you always looking for the 'PERFECT" time to purchase a home. The window of perfection is too small and too subjective for many to take advantage of. But I will tell you this. Today is as close to perfect as you will likely see. Inventories are declining, Interest rates are at near record lows, more units are selling today than at any other time in the past three years. And all of these facts are indicators that we are near the bottom of our current market. And that is the absolute best time to purchase. One thing to consider, even if values drop another couple of percentage points, if interest rates go up even marginally from where they are today you will have lost any gain that you might have from the lower purchase price. If you are ready to be a home buyer, today is a great day to jump in with both feet.
Happy home hunting