Hi Firsttimer - I just joined Trulia so a little late to the ball game on this question but I'll put in my two cents. You've got over 50 answers from people throughout the country and only a handful from people in the local area.

The reason this is very important is that history has shown over and over again that we generally are the last to fall into a recession and the first to come out. In fact, according to the Center for Regional Analysis at George Mason University, we actually have not entered a recession yet in this local area - just a slow growth period. The rest of the nation officially entered a recession in December of 2007.

I work mostly in the Fairfax/Reston/Herndon area so I cannot comment from direct experience on your part of Alexandria. I can, however, comment on my areas and the signs are incredibly positive. I have stopped worrying about getting enough business since the beginning of this year and started worrying about how to manage all of the people I am working with. Activity has been on the rise and the inventory is shrinking.

Any bank-owned property worth anything has multiple offer bidding wars within the first three days on the market. When the demand is this high, recovery is just around the corner. I have seen a stabilization in prices in several neighborhoods since summer of 2008. This also implies that our slow rise in prices will start shortly - I would say no later than spring of 2010. Of course, the foreclosures keep the prices low so it is a delicate balance of getting past the volume of foreclosures back into a more normal market.

It's all very localized - depends on your particular neighborhood. For example, there are other high end neighborhoods further out in the suburbs (Ashburn) that have not fallen much at all in price; and they are just now starting that cycle of foreclosures and short sales and prices dropping.

One final example of the crazy buyer demand that we are experiencing - I did an open house yesterday on a bank-owned property that is listed for $391,900K in Fairfax - I had 35 groups of people through during a 3 hour open house. I ran out of materials and had to get family members to run out and make copies for me. I was expecting no more than 10 groups through because it was bank-owned (about 5 for a non bank-owned property used to be a good average during the past two years).

Hang in there - I am excited about what the future holds!

I think you will need to wait for 10 years before you will be able to make a profit or break even. Prices will continue to fall...most likely to 2000 or 2001 levels, which is where this housing mess began. They may even overshoot and go back into the 98-99 range. I wouldn't be surprised if that happens. They'll come back up, but it will take time.

Side note--Richard Heirs could be a bit misleading about renting...depending on the situation, renting can actually be better financially. If you took the extra money saved on rent instead of a mortgage and invested it in the S&P, you will usually come out with more money in the long run. But that would only be in situations such as now, where the cost of renting versus purchasing is a large difference. When rents are the same or more than mortgage payments, then it makes sense to buy and make your home a solid investment.

Remember this, homes are not assets...they are liabilities that require monthly payments just like a car or any other item you have a loan for. It only becomes asset money once sold for a profit. In the meantime it is nothing but a liability.

I'll keep it short in answering your question:

-when inventory can't keep up with demand.


When will that happen?

-when foreclosure velocity eases
-when median incomes catch up with median home prices
-after retracement in the housing bull market.

I don't mean to sound flippant, but home prices will start appreciating on a national basis after they've hit bottom: Just when they will hit bottom is anybody's guess!

Although some markets are experiencing appreciation, most are depreciating because of the massive run up in home prices between 2001 and 2006 among other factors. You can see market trends from Case Shiller: http://www2.standardandpoors.com/spf/pdf/index/cs_national_v… . The report illustrates one of the LARGEST quarterly drops in home prices for the 1st quarter of 2008 with current prices approaching those of the 3rd quarter of 2004. And according to a report put out some time ago by Mark Zandi, Chief Economist of Moody's Economy .com, he predicted it would not be until 2013 when home prices reach the peak they achieved in 2005. You can visit the website - http://www.economy.com/dismal/article_free.asp?cid=103620&am… .
Both Mr. Schiller and Mr. Zandi are much more capable of predicting future trends in home prices than me and I certainly put lots of faith in what they say.

And just today, according to a credit strategist with The Royal Bank of Scotland, there were dire predictions of huge price declined in the S&P by September. His report can be read http://www.businessweek.com/investing/insights/blog/archives… .

As a quick aside, I was visiting my son's school the other day and was looking at a list of all the Presidents of the United States. I noticed a changing of Presidents from Calvin Coolidge to Herbert Hoover that took place in 1929 just after the stock market crash that ushered in The Great Depression.

According to Wikipedia:
The Great Depression was a dramatic, worldwide economic downturn beginning in some countries as early as 1928. The beginning of the Great Depression in the United States is associated with the stock market crash on October 29 , 1929 , known as Black Tuesday and the end is associated with the onset of the war economy of World War II , beginning around 1939.

Could history possibly repeat itself? I shudder to think so!

Now to provide closure to your question. Were you really stupid - NO, Will you loose your shirt -ONLY IF YOU SELL IN A DOWN MARKET, When will you be safe to consider selling - YOU WILL KNOW BY PRICES IN YOUR AREA. IF YOU DON'T KNOW MARKET PRICES, ASK A LOCAL REALTOR - THEY'LL KNOW.

Remember: The only time you loose in Real Estate is when you sell in a down market without buying or when you sell and buy a lower priced home in a down market. If you are buying a more expensive home, there is no better time to do that than in a down market - LIKE NOW!

Also remember - Whether times are good or bad, you need a place to live. I have lived in my house for 25 years thru times both bad and good. I never thought of selling my house because I feared bad times were ahead. I hope this helps.

The best correlation for increasing home prices is increasing employment. The DC Metro area is fairly insulated from huge swings in employment due to the presence of the Federal Government, but we are currently seeing a small reduction in ancillary jobs in Northern Virginia. Add on top of that a very difficult lending environment, an increasing supply of homes on the market, builders tossing in freebies to move projects that were started 2-4 years ago, and foreclosures creeping into the close in markets and you have a recipe for stagnant pricing. First, we need to work through the excess inventory of homes available and foreclosures, then we will see pricing start to move upward.

As long as you aren't looking to sell within the next 2-3 years, you shouldn't lose your shirt. Until then, enjoy your home, use all the tax advantages of home ownership, and don't stress about something that said won't be happening for several more years.

Develop a relationship with a savvy Realtor in your area and get on their mailing list so you can watch the market. As long as you hold the property for a few years you will make money on it for sure. There is no crystal ball, unfortunately, that tells us when the bottom of the market or the top of the market will hit... the only thing we have are past cycles to looks at and in any case, holding a property for 5-10 years before selling is always a good investment.

Relax. If you paid the same amount that it sold for in 2004, you've got a property poised for appreciation. How soon that begins and how much depends on your geographical location and any local factors that might influence land values. And please remember: you bought the home, not as a get-rich quick scheme, but as a solid investment and a tax shelter. Think how much better off you'll be in 10-20-30 years than if you kept renting!

It sounds like you are doubting yourself, but it really isn't your intent to move or sell right now. Unless you have reason that you must relocate quickly, take a deep breath, relax, and enjoy your home.

No one knows what will happen in the next year. Your area might face additional downward pressure. If you are going to be in your home for a a number of years, it becomes a paper loss, and a temporary one.

While I don't know the details of your purchase, on the surface, there are not indicators that you made poor choices. You bought recently at a price point equal to 4 years ago. That doesn't sound like you were paying premium pricing. Again, I don't have any specifics, so my review is on a superficial level.

It certainly does not sound like a decision to lead you to financial ruin. In your own words, you were looking for a home. it sounds like you purchased at a decent price, and so, now....enjoy your home. Do you have a reason that you need to consider selling? Or are you simply nervous?

According to the Homebuilder's Economic conference in Washinton several months ago, we're looking at 2009 before things start turning around. Will it happen then? There's still a lot of inventory that needs to be absorbed before we see it happen.

Real estate is local, true to a certain extent. The economy is global. Lending is global. Banks everywhere are not lending unless the borrower has very good credit score and a large downpayment. So with the economy in the tank and few qualified buyers around, it can mean only one thing everywhere - downward pressure.

http://www.cnbc.com/id/24311464

Barbara
Local experts are fine if they are objective. Agents are not objective, you can't be when your income depends on houses selling.

Attached is a Zillow chart for the area, they too seemed to peak later. However you don't have to be a mathematician to see where it is headed.

Again, the answer to her question is: No not stupid, just don't expect to make money on the house if you sell in a few years.

Greg,

Real Estate is LOCAL. In central florida we didn't see rampant appreciation until 2005. We peaked in 2006. So it depends. 2004 pricing might not be so terrible. I own real estate in San Antonio and while length of time on the market is getting longer the pull back in pricing has been minimal. In Louisiana it may be similar. AND SINCE WHEN have national economists goten it right? I watch CNBC nearly every weekday morning. The experts disagree with each other ...we have no real consensus to guide us. I'd rather rely on local experts reporting what is happening in their local markets.

I guess I am the "disgruntled homeowner buyer"? You know what happens whey you "ass/u/me"

I am a homeowner for 15 years, and I LOVE my house. It will end up being a great investment. I bought in 1997, a great time to buy. It was luck, I just wanted to move then. 2004 was the peak of the biggest bubble in history. It was bad lucky that you bought then. Houses will appreciate again. I agree with that. However, it will be after we return to historic levels. They never should have gotten to the 2004 level in the first place. If you spend more than 3x your family income on your house you are hostage to it, that it why we will drop back to historic prices.

Your not stupid, but you did make a mistake. However, if you can wait it out, you will eventually see a positive return on your investment. The mistake you made was not researching the property more in depth, but you know that now so...lesson learned. Ignore the disgruntel home buyers who have obvioulsy been burned by real estate agents or who have most likely lost their home to foreclosure. The problem right now is do to the high volume of people who should have never even been qualified to buy a home, who are foreclosing. The market "looks bad because of the high volume of bank owned properties listing for lower than the appraised amount. And because they are bank owned, they are sold as-is, and in most cases not cleaned/upgraded/staged to show properly, making an already weary buying market less inclined to buy. The outcome is, renting is up and at record low rates, and high volumes of homes are sitting...unsold...for less than their worth. Bottomline, 1 million houses will not sit vacant for long, when they are sold, the market will stabalize and property will begin to appreciate. With that said, even though I believe real estate agents don't care wether or not you can afford a home as-long-as you can qualify and close so they can make commission, they are right about the news just reporting the negative. The Nation is currently in a scenario where the statistics can be interpreted both ways, and CNN will always run the story about the trainwreck before it runs one about a sunny day.

HI.
I am a realtor in Pinehurst NC, Here we have been lucky ,so far .We still have just about the same volume of home sold and bought a year. We do however have a decline in pricing of re-sale home's and builders are trying to "wait out" the wave of very very low offers on new homes.
I believe that we won't see a stable housing market for another year and a half maybe two. I suggest that you hold on to your home ( if you can) and just update the things in your home that you know would go well with buyers. And before you know it prices will stabilize and even go back up little by little. I do hope you are not in a hurry to sell, because of a mortgage you cannot afford anymore.Try to re-finance with a bank that you have done good business with for a while. AND don't be afraid to bargain with banks , they are just a business like evry other business.They can and often do try to giveyou what you want .But don't forget to ASK.

Yes, don't listen to Yale Economists, instead listen to a Louisiana RE Agent. He knows more. LOL

We will be down for many years. You paid at the peak of a market artificailly created by the sale of mortgages packets. People got burned buying them at too high a rating. You won't see them buying those again in our lifetime.

Enjoy the house, but don't think you made any money on it, you didn't. Sorry for the truth.

The market is fairly stable with the exception of a few states like California , Florida, and Arizona. The market is very good here in La. and I truly believe that we will see prices start to appreciate in most areas by the end of this year. Don t believe much of what you hear on the Nat. news. For some reason they prefer to report all of the negatives and hardly any of the positives. Thanks, Larry Auger, West Monroe, La

Were you stupid?...No Way- You made a great decision to purchase a home! Not only did you make an investment in your lifestyle where you will receive many non-monetary benefits, your home is the best long term investment you could make! Enjoy it!

After the meltdown of home prices, there will be a leveling off period when the market will be stable again and the prices will begin to appreciate one again. Supply Demand factors kick in , so it depends where you are located and the population demand for housing. In some high demand areas when it comes back it will come roaring back while others will see smaller appreciation.

Any nitwit can be a "RealEstatePro", in fact most are. Don't believe anyone on here who speaks in absolutes, like "you will definitely make money" or "it's definitely the time to buy." Over the long term, you should probably make money, but remember what John Maynard Keynes said, "in the long run, we're all dead."

If you were looking for a deal, you will know when you go to sell if you got a good one or not. As for now, enjoy your home. Why spend time wondering if you think you did something "stupid" with this purchase. You really answered your own question...you were looking for a home and to me it sounds like that is exactly what you found. May you find many happy days with it and when you go to sell, I hope your market is favorable to you.

In March Port Charlotte, Fla saw a 13% increase in home sales, my realtor has also seen an upward trend in sales in SW Florida, I just bought a large home in Bradenton, Florida which I close on next month, which I bought for $50,000 less than market value,mortgage rates are excellent at this time, good credit is now a must. I currently own 2 other homes, one of which is on the market, people are looking, which means people are still buying trying to get a deal. Don't run scared the economy always recovers and I have always found realestate to be a sound investment, but if your looking to make a killing selling, you may be disappointed. Unless u must sell, sit the market out.

Hello Firsttimer,

"Was that really stupid?"

From my life experiences, of which there are many, I feel pretty confident saying that most people in the USA do not think it is a stupid idea to buy a house that you can afford to pay for, which you are going to live in and make your home. If you have bought a house that is within your means to pay for, then you don't really have anything financially to be very concerned about, unless you just like to worry about things you have no control over (like predicting the future). Given that some of the alternatives to buying a home are paying rent, living with mama, or in a travel trailer, all of which I have experienced, I like the own your own home option.

The price you paid is largely irrelevent at this point. Think of it like buying a new car and always wondering if you could have bought it somewhere for less. Of course, you could. There is always another day or another place to pay a few bucks less or more for something. But once you have bought your home, guess what, it's yours! Now you get to take care of it, improve it, and pay it off. Quit worrying about the value of it in dollars and cents, and squeeze out of it all the value it has as your home, a haven from an otherwise cruel world. Play your CD's loud, dance around in the kitchen, cook for freinds and family, and plant flowers, it's yours to enjoy!

Here is a new idea--If you really work on paying some extra towards the principal amount owed on your home mortgage, you will wake up some day and find that you have it paid for! yes, this actually works! And having your own home paid for is acknowledged by many independent financial advisors to be a pretty smart thing to do, since it provides you a roof over your head and allows you to invest the part of your income otherwise going towards your mortgage payment into home improvements, cash savings, retirement plans, tuition for kids educations, and other investments of your choice.

Congratulations on making a great choice. You'll do just fine. Quit reading any news about real estate and this forum!

Dan Therrell
Fairhope, AL

"Stop listening to the news on how bad America is and only think good and postive about your investment."
Here is a perfect example of the pollution on these boards by those WHO ARE NOT UNBIASED! In other words, Ms Ridens and others of her ilk would have you put your head in the sand, switch off your brain, and spend, spend, spend yourself into economic prosperity. Why do you think the Fed needs to orchestrate a bailout? Because too many people ignored what made economic sense and bought into what these people told them. Go ask a car salesperson if you need a new car -- see what they say! If anything, we need a good housing downturn (prolonged too) just to shake these types of people out and back to whence they came.

For buyers waiting for the market to completely bottom out, you won't know when that will occur until prices start to climb again. Many local (Seattle area) neighborhoods are still seeing gains, albeit modest ones. I predict within one year (or 2009's spring market) we will start to see prices creep up again, but nowhere near compared to the last real estate rush we are on the downhill side of ...

I think you have made the best decision to buy a home instead of renting and making a landload richer.
I have been a 25 year investor in American Real Estate and have never sold any property and not made money for myself of my clients. If I could purchase homes in my state for a 2004 or older price range I would be buying more property at this very date. Be sure to always take care of the property and improve to increase the value faster. When you are thinking about selling visit the closest realtor to your property and you should get it sold with great results. Stop listening to the news on how bad America is and only think good and postive about your investment. Keep up with sells only within 30 to 50 miles of yours, that is what matters. Geraldine Ridens - East Tennessee (Email) : geriridens@charterinternet.com - Your Smoky Mountain Connection to a great Life in Tennessee Hills.

Until the National News Media stops convincing people the housing market is still falling apart we will continue to see prices slip. People in the market for a home are waiting for the bottoming out and those who want to sell have lowered prices about as far as they can. As soon as the media stops telling people that home prices are still dropping we will see homes start to sell again.

Remember that the realtors who troll these boards are about as FAR FROM UNBIASED as you can get. They definitely have been drinking the kool-aid brewed and served up by the NAR. Their income and lifestyle depend on housing going up and up and continually changing hands so what else are they going to say? Moreover, a lot of these people have no skills - not even viable selling skills. Their boats rose with the tide from 2003 - 2006 and they are scared to even think about a stagnant market - and in fact refuse to do so. They can't code in C++, most have no management skills, and most don't have enough education to go into teaching. Many too are in debt as much as their homedebtor clients are, having bet the farm on future price increases of 15 - 20% well into the indefinite future. That's right - I'm talking about you with the 5-series BMW and the 3500 sq. ft house with nary a sale in the last 2 months! If we do get a stagnant market, articles will appear in the USA today (probably about October or November) about how realtors are 'changing careers' or 'between jobs' or even bankrupt and on welfare. Want to make money? Start a blog or website geared toward assisting ex-realtors with this transition to another job. If the housing market really dives, as they fear, they will simply fade away - like the lone penguin on his late walk in March of the Penguins - "swallowed by the vast whiteness all around him" in the words of Morgan Freeman. Hopefully I scare some of them out of here or at least wake some up!

Bridget Laszlo is not completely correct - "home is a great investment. You are building equity and not throwing money away on rent". Add in maintainence, real estate taxes (the % that is really not deductable) and homes appreciate on average 0.4% a year. There are a number of rent vs. buy calculators that will show renting can be a better deal, assuming you place any extra $$ into stocks & bonds.

Ignore all of the agents here telling you 'the sun will come out, tomorrow'! These people are desperate! Here's your answer: A home is not an investment nor is buying one like spinning a roulette wheel!! You are confused and so is your post! First you say you are 'just looking for a home', and then you say 'when can I sell'? Which is it? I think you were a wannabe flipper who is in denial and who is now telling yourself (and us) that you were only looking for a home. Unless you can locate a buyer just stay put. Otherwise, bite the bullet and sell for what the market will bring. Of course, Bush and Bernanke may come along and rescue you with a bailout if (as I suspect) you are 'underwater' on your home.

All real estate is local. Some areas in Los Angeles where I am at are not impacted by sub-prime 0 down loans and significant over building. Example Beverly Hills price YOY +20% or so. Other areas Antelope Valley and Inland Impire YOY -30% many homes sit empty and hit by over buliding and foreclosures. My bet is slight decline nationwide and flat for a year or two then a rush back into the market with increases of +7% for a few years. I would run 5 and 10 year outlooks for all your clients as the shortgame play is dead for now.

Good luck!!!

The real estate agents here will say, soon, next year for example. Not me. I say when income is 1/3 of median price in a town or section. Wages are not likely to rise so that means prices will have to decline. Since the system is full of optimistic spinners it will take 3-5 years to cycle up, IMO. If more people were heard to say prices must come down, the cycle would shorten by prices coming down. Here and there are areas where enough buyers can buy the inflated properties and because there is not enough housing the prices stay up longer. Look at local factors, median income, median prices and the rule of 3 maybe 4 times income for housing availability. Call me old fashioned. But don't call me Shirley. Be careful who you listen to about real estate.

Now is an EXCELLENT time to buy, especially if you are financing your purchase. Interest rates are extremely attractive. I live and sell in the California Palm Springs Desert area and many of our properties have actually "held their value." Real Estate has always been a good investment if you are buying in an area that is NOT depressed. Even during times when prices are low, they always rise up again. Flipping a home in today's market is NOT anything I would recommend trying, but holding on to it, enjoying it, building equity and eventually selling as you mentioned is wise. It will also offer you a nice tax break as well.

As for selling your home, you need to ask yourself WHY are you selling. If it is only to make a profit, then you need to wait until the prices in that area have risen enough to cover the cost of selling. And that will depend on the area you are living/investing in.

Just like stocks, there is no "crystal ball," but both the stock market and homes have generally risen over time, and are very good investments.

I hope these answers have been helpful.

Nancy Hankin: Broker Associate
SRES,CRS & e-PRO
"Old Fashioned Service Using
New Fashioned Technology"
Remax Real Estate Consultants
74-199 El Paseo Suite 101
Palm Desert, CA 92260
(866) 227-2205 Toll Free
(760) 861-5118 Direct
(760) 779-8196 Fax
Access all Desert MLS Properties for Sale via my Website
mailto:Nancy@NancyHankin.com
http://DesertHomesAndEstates.com

If you plan on staying in the house for more than 2 years, you do not have to worry about your investment. Live in it and enjoy. People will always need homes to live in. 2004 was a peak year as far as real estate prices; enjoy your good fortune and remember -- the upswing is coming! diane@westwoodrealty.com

The answer as to when homes may begin to appreciate again is going to be determined by a lot of variables. Fortunately, in the Alexandria area, as opposed to many other areas of the country, we have a low unemployment rate (generally around 3.2 percent as opposed to over 5 nationally) and about 40,000 new jobs created annually to help keep unemployment low.

So, while I noticed a couple of answers that said we won't see appreciation again here until 2012 and one that said not for 10 years, I also saw that those answers came from people who are not in this area and probably are not familiar with the economic conditions here.

How soon you may see appreciation on your home depends very much on where you are in Alexandria. If you are in a more outlying area or one where builders have added too much to the housing inventory for demand to match supply soon, the wait will be longer. Some areas that are more centrally located, however, have managed to hold fairly steady on price and some have even seen some appreciation.

In any event, since you don't plan to sell for several more years, you might take comfort in knowing that since the government has been keeping statistics on home appreciation, there has been no ten-year period when homes have not risen in value, even though they may have fluctuated during a quarter or half of that span, ultimately they recovered and hav appreciated on an average of about five percent annually.

A moment ago - Delete this answer
Web Reference: http://www.alexandriahomesearch.com;bobwood.lnfre.com
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Answered by
Bob Wood
Real Estate Pro
in Alexandria

The only way you know if you're getting a good deal is to know what comparable properties are selling for when you buy.

Were you stupid? No. Just not sufficiently educated about determining value in real estate. A lot of people made far worse mistakes. Since you don't have to sell and you ended up with a place you like, you're fine.

No one knows for sure what the real estate market will do. And, as others note, real estate is also local. I'm familiar with much of Alexandria: I worked for 7 years on Mill Rd. near the Eisenhower Metro stop, and I've worked another 7 years on the north end of Old Town. Alexandria's holding up pretty well. I'm a bit concerned about all the new construction along Eisenhower Avenue--whether that'll be a glut on the market--but otherwise it should do OK. As for prices in Alexandria and surrounding areas, considering BRAC a bit to the south, all the associations in Alexandria, all the federal employees, and the new office space around the Hoffman Building, my best guess (only a guess) is that prices will dip a bit more this year and maybe even next (2009). Then they'll stabilize and start climbing upward. And it might not even take quite that long.

No, you're not going to lose your shirt and you're not going to end up in financial ruin. And if you hold the property for another 4 years or so, you most likely will come out ahead.

Hope that helps.

Many people are saying there won't be appreciation for 2-3 years. I agree. However the market will be dropping for those 2-3 years back to historic levels.
Your question is when will you see 2004 prices again? Adjusted for inflation, maybe never. If you bought it on speculation, bad move. If you bought it for an investment? Bad move. If you bought it to enjoy? Congratulations!

The Japanese RE bubble lasted 17 years. We just had more serious restriction on credit this week. The Alt-A mortgages are due NEXT year, 2009 looks like it could be worse than 2008.

Attached is Alt-A explained, it is taken from Govt data.

Hi Firsttimer,

From your description, you got the house for the same price from 2004. Right there was a good investment and since you mentioned that you won't have to sell anytime soon , my guess is that you are in a good position. In answering your question about when will the market start appreciating again , well the experts say 2 to 3 years. In my opinion by the end of 2008 we will have a more clear picture of the real estate market thus enabling the experts to make more precise predictions. Cheers.
Leonardo

"The National Association of realtors says that this is great time to buy and I agree!"

please, please- can ANYONE can give me an example of the NAR saying that ANYTIME was not a great time to buy?

and to the dude that told us that with 6% inflation, the house would be 530,000 but the salary would only be 106,000- everything else rose by 6% too. you know, groceries, bills, consumer goods, other houses. which means you make 106,000, which is more, but you get a lot less for your money spent than before.

so yeah, if an electrician's salary only rose by the amount of inflation through the years- they really aren't making any more than before.

Owning a home over the long term (5-30yrs), historically is one of the safest, most lucrative investments. But recently (the past 7 yrs), a house has become the sole investment/savings account for Americans.
Somewhere along the line, a house has become the main source for borrowing money (second mortgages), paying off debt (selling and buying in a short period of time) and making money (appreciation). And that's part of why there's so much disruption in the market right now.
Hopefully, you don't have all you eggs in one basket. And for the most part, you should see some decent appreciation after 5-7yrs of owning a home.

This question is very specific to the economics of the local market. For example NYC will definitely be different from Detriot which will be different from Atlanta. Some people have been pushing that R/E is a bad investment, but if you really look at the facts, it is a great way to accumulate wealth. There is a quote about statistics that says,

"There are lies...damn lies...and statistics."

The problem with all the numbers on the R/E market coming out is that most people honestly don't know how to interpret the numbers, except to support their pre-conceived agenda. It may actually take a little thought and not restating canned articles, but the truth is that you have to account for all the specifics of your local market as well as the national factors.

Personally, I think markets like NYC metro, San Francisco, Chicago, and Seattle (and maybe Atlanta and DC) have come close to the floor and will see appreciation faster than markets such as Phoenix, Miami, Dallas, and Detroit. I have a specific methodology behind my beliefs...but it is something that looks at the specifics of the market...not general NY Times articles.

By 2012? I doubt if it will be that long!

you should be ok by 2012, but that depends on some other things, like how long this recession is going to be

If you stay in the home "for several more years", you shouldn't lose your shirt. Making a profit after a while is a definite possibility. Start thinking about selling when the news media reports the housing market is up. They all report on real estate and finding a story is easy with cable, news print, etc.

I bought a place in Alexandria and essentially paid what the home probably would have sold for in 2004, and this represented about $75K less than the sellar's asking price. Believe me, I was very squeamish about this because prices were (are) declining; but the houses are selling. The deciding factors for me was we love the area, we're not going anywhere for awhile (ten years at least), and we won't outgrow the place. I still watch the area houses come on the market and cheer when someone pays more than I did, and frown when someone pays less...and I cheer more than I frown...so life is pretty good in Alexandria.

Ben is correct about the lending. If banks had followed the nuts and bolts lending they are getting back to now from the beginning this bubble would not have been as big. In areas where the borrowers did not have excellent credit and are starting to feel the crunch, you will continue to see declines in prices as these sellers will have to sell. In areas where people bought within their means and have a good financial standing you will see things remain flat. Once again only locally can you find out what is truly happening in your market.

What Ben does know is how not to fall for realtor spin.
Housing has its ups and downs. But in recent years, it became a giant bubble and is now deflating.
Real estate may be local, but lending is global. Banks everywhere are not lending unless the borrower has excellent credit and a large down payment. This has a price effect everywhere.

Anyhow, here is a video version of the Times article
http://tinyurl.com/4gmglh

Ben Doesn't know his Real Estate Ass from his Elbow. People who think that an national economic indicator will forcast a local market are what continue to cause this market to stay down. You don't watch the weather channel for its national forcast, you watch it because you want your "LOCAL" forcast. Only a local real estate expert can help you figure out your own local market. What the New York Times article illustrates is the average sales price of a home taking out economical factors like inflation. That would be like saying the average salary for an electrician hasn't changed in 120 years if you take out inflation. The truth is that the housing industry absolutely has ups and downs unlike any other market, but the value of a home is much greater than any other asset you have, so when inflation is up 6% you home appreciates more than your income or other assets simply because of economics. If you own a $500,000 house and make $100,000 a year a 6% inflation rate would make your house worth $530,000 while your salary is now valued at $106,000. I'll take that any year. Do yourself a favor, treat Real Estate as a long term investment, not something you will make money with overnight. And when you are looking for information, look for local stats and figures, just like you do for sports, weather, and the stock market.

While there is no definite answer, I have been told in conversations about three years...

No one can accurately predict when home values will start appreciating again. We are in a cyclical downturn and eventually the market will turn back up. If you are not selling for several more years you should be just fine. The time to feel safe in selling is when you see listings in your area start to decrease and can find out from a professional realtor what pricing has done in your area over the past six months.