Will prices go lower?

[Bobby J]

Have we hit "bottom" yet?

We will never really know when he hit a bottom until we have left the bottom. Also, RE is so local in nature it may be different a block away. What area and what are you looking for?

 

[Lynnie]

buy when everyone is negative.

negative = upside down

Sorry, couldn't resist. ;-)

 

[Smiling JOe]

Bobby J is spot on. Real estate is very local and bottoms are seen only after they have passed.

Bob is also spot on, the old Warren Buffet philosophy works. When your plumber is telling you to sell or buy, do the opposite, because by the time your plumber knows, it is well after the best time to do it, unless we are talking about plumbing products.

There are too many unknowns to predict the bottom, but looking at real numbers on graphs and charts, we see some stabilization on selling prices over the last six months, but most inventory coming on the market, and the inventory which is being withdrawn is priced much higher than the prices which are selling. Most of the inventory is overpriced, and when listings get to the WoW price, they sell fairly quickly, with multiple offers coming in. Remember that many buyers have been watching patiently over the last five years, and they know the right price when they see it, and they are very quick to act before someone else does.

 

[Kurt]

yes the gov't is 100% looking at mortgage cramdowns. several articles have said this is why the gov't just raised the freddie mac/fannie mae lose limits to UNLIMITED.pandora's box is about to open as millions of people who wouldn't have walked away from there mortgages will walk if the gov't goes down this insane road.we have followed the exact road of japan from 1990. WE REFUSE TO TAKE OUR MEDICINE AND GET THE PAIN OVER WITH. INSTEAD WE'VE EXTENDED THE LIVES OF 1000'S OF INSOLVENT CO'S THAT ARE SUCKING THE CAPITAL AWAY FROM MANY CO'S AND PROGRAMS THAT NEED IT. ITS A MASSIVE MISALLOCATION OF CAPTIAL THAT WILL HAUNT US FOR YEARS OR DECADES TO COME.WE'RE IN THE FIRST INNING OF A NATIONWIDE DELEVERAGING OF THE CONSUMER AFTER 30 YEARS OF RECKLESS BINGING.


Treasury has reloaded its bazooka and stands ready to shock and awe the housing market.
Though, Standard & Poor?s/Case-Shiller data showed a fifth month of improvement yesterday, analysts still expect prices to fall 10 percent or more next year as various government supports wind down.
Political pressure ahead of midterm elections will likely force the administration to do something in response and Treasury?s Christmas gift of nearly unlimited support for Fannie Mae and Freddie Mac gives them a powerful weapon to do so.
But it will be a tough fight as artificial, government-sponsored demand dries up.
The housing tax credit ? $8,000 for first-time buyers, $6,500 for move-up buyers ? ends in April. Meanwhile, the Federal Housing Administration plans to tighten its loose lending standards as its reserve fund has dwindled.
Moreover, mortgage rates may head higher as the government ends purchases of mortgage-backed securities. Treasury?s $220 billion buyback program ends this week. The Federal Reserve?s $1.25 trillion program ceases in March.
And then there?s the continuing flood of Treasuries to finance the federal deficit. Morgan Stanley estimates that could drive 30-year mortgage rates back above 7.5 percent, an effective 40 percent increase in the cost of financing home purchases. That looks high, but even a smaller jump will drive buyers from the market and force house prices down.
But the biggest threat may be foreclosures. Credit Suisse expects 4.2 million next year and says that 3.2 million must be prevented to keep prices stable. That?s a tall order, considering unimpressive results from modification efforts that mostly focused on extending terms or lowering interest payments.
Banks, mortgage bond investors and servicers are loath to go further, by forgiving principal, because it?s either a direct hit to capital or tricky to do under current bond documents. Extend and pretend is less painful.
Enter Fannie and Freddie. With unlimited support from Treasury the two have theoretically unlimited capacity to eat losses, useful to Treasury if it wants to finance an expanded modification program that includes principal forgiveness.
It?s a tempting weapon to deploy ahead of midterm elections. But financing principal writedowns with taxpayer money only adds to America?s debt burden while rewarding irresponsible borrowers and lenders.
Dec 30, 2009 08:05 EST

Please provide a link and use quote tags.

 

[30ashopper]

The old mentality that housing is some sort of get rich quick scheme appears to be back these days. When you hear people using Buffet's stock investment philosophy for RE, be careful... "you must buy now or loose loose loose out on great deals that will never come back! Make millions in housing! Now is a great time to buy your first investment home!"

 

[Smiling JOe]

Who said Buffet is about get rich quick? I hear something different from people. I hear people saying, "if you like it and the price works for you, do your homework and go for it." Not, buy now because you will make crap loads of money in the next year. Are you reading a different thread from which you are forming that opinion?

 

[Bobby J]

Here are two facts about the market:

1. We will never really know when we are at a bottom until it passes.

2. Desirable property sells fast if price is right.

 

[30ashopper]

Five key items to watch in 2010 for housing - nice summary from the WSJ:

How Will the Housing Market Look in 2010? - Developments - WSJ