I really do not think prices overall in the fair market will diminish. Look around where you live now. Listen to the market news. There is lots of evidence that the market has bottomed. However, stress on market areas are what has driven prices down to what they are now. North Wildwood and the shore area have seen dramatic decreases in fair market value.
Knowing the shore market, the 2nd home market, is particularly different than the the more standard markets of main stream residential home areas. If you are a person looking for a 2nd home for an investment, the prices are down to 2001-2002 prices right now. With inventory levels lower means higher prices are more prevalent than lower, but don not look for dramatic higher prices until 2012 and after. No one can predict the market. But now is the time to buy in the shore areas, People will be coming out to look starting Feb and march. The best deals will be sought out first. If it is a short sale you are interested in you'll want to be in before the summer not at the end. They take time figure 40-60 days. Rentals are still strong, everyone goes on vacation. Closer to the beach the higher the rents. Buying lower now will provide a better return on investment this year. Buying now will provide you with the sumertime events everyone is looking forward to. If you wait to buy at the end of the summer you will be waiting an entire year again to see any value of your investment paying mortgage over the next year also.
The 2nd home market is usually the first to turn around when the economy is leading off to better horizons. Lower inventory levels indicate a better turn around in the 2nd home market. It's not exact science. Anyone tooting horns shouting the end is near is not sane. But to say it's all better, no. I do not see the stress on the markets as we have seen. There is much better controls in place and it will only get better from now on with some camel hump fluctuations. Very minimal and short term.
However I went all in on the stock markets in March, stayed away from financials mostly, only taking on the big guys. All the tell tale signs are there for a stronger economy. Government has provided so many avenues to jump start it's just has to get better. Will there be camel humps, yes. If we see a sudden spike in price levels all at once, then it is uncontrolled growth, much of what we have seen in the past. But with strict lending guidelines. I want to say strict but actually, it's just back to the basics of lending now; Money down to buy. Interest rates are really low. I see a spike in rates coming soon also. The government has kept the dollar low to pay down debt. But it cannot hold at these levels and so interest rates will spike also. The stock market will also get hit again. Whenever a turn of events occur there is always seller, when there is sellers lower prices is the result. When there is no more to sell or little to sell then higher prices will ultimately be the result. Will that affect real estate markets, probably, but people will still buy. I really do not see the stress on the markets unless inventory levels are suddenly released and that is not going to happen. The government will not let it happen. Again it's not exact science, but just look around you, some people are out of work and others are making fortunes.
Understand this, pricing levels are low. The 2nd home market is strong. Inventories levels in these markets are lower, just as they are all over. I do not foresee any real spike in prices either. We are consolidating into a normal market. You will find some deals, but understand this everyone is looking for that one bargain. You must act on it or wait for the next and then how long can you wait? That is a question only you can answer!
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