That's the question everyone is asking, including ourselves.
My concern is that we need to get the homes that are selling as short sales and foreclosures off the books. The other issue is that banks need to start lending again. Banks are very tight right now and it's making it hard to get a loan. 100% financing is gone. Word has it that even FHA will require 3.5% as a down payment soon. Human underwriters are coming back, instead of desk top underwriting.
I'm actually in favor for it because it worked. We're going to start seeing mortgages being handled the old fashion way.
We may experience this for another year.
I just attended the Iliinois Assocation of Realtors convention a little or a week ago. We heard from several industry experts as to what they are predicting for the future in homes prices. Most agreed that homes will continue to decline about another 4% over the next year. That percentage is on average nationwide. Some states will far better or worse based on the amount of their inventory. However, on a note for all buyers, now the experts are saying is the best time to buy a home in Illinois in the past 39 years. Their calling it the perfect storm. Best interest rates, best supply of homes to choose from and excellent affordabilty levels.
IMHO prices will be more depressed 6 months from now. We're in a recession, let's hope it's just a recession. Job losses should be about 200,000 per month, for the next 12-18 months--if this is just a regular, mild recession. Maybe wait to buy. Good Luck
The truth is that no one will know we've hit the bottom until after the market has started to recover. I do see some signs that we may be closer to the bottom then most people think. For one thing, banks are starting to work with buyers on short sales - something that wasn't happening earlier this year. Properties are being absorbed into the market and though there will be more foreclosures and short sales as the economy worsens, there is also a pent up demand from first time home buyers who have been waiting on the sidelines for the right time to jump in. Also, the government has been pumping a tremendous amount of money into the economy, and with a new Democratic president and congress we can expect that to continue (also more programs to help keep troubled home owners in their homes).
I don't see a quick turnaround, but I do expect that the housing market will hit bottom before the over all economy starts to recover. If you are in the market to buy now, there are tremendous bargains. If you are planning on staying in your home long term and you are buying a good home in a good area, chances are you will do well in the long run.