Exactly right. With the rise in real estate of over 100% in only 4-5 years it should be the same case that it could easily fall another 20-40% in some over heated sectors of some US cities. I predict another 10% drop in housing prices over the next 6-12 months, if you are looking to buy hold out, the bottom is not in. Aside from that foreclosures havent peaked yet, another 2 million foreclosures by the end of 2008, I see a peak in foreclosures by mid to late 2009. Foreclosures alone with a glut of houses on the market already, will make for a very slow comeback for real estate. No bottom for at least 3 years, things should pick up by 2013-2015.
And after finding "a bottom" RE might stay flat for next 5-7 years. Who is going to drive it up again? Most of the participants of the current bubble will be fed up with RE broke and with damaged credit record.
The bottom of a real estate market is marked by total pessimism - people looked with disbelief at somoene opening a chain of real estate agents right at what proved later to be the bottom in UK, similarly a proprty pro who had been through the Canadian recession told me how people thought he was MAD for entering the Thai market at what later proved to be the bottom. So far we have not even seen people waiting on the sidelines for prices to come down buying yet. The bottom is nowhere near until these people have bought and are later cursing themselves for having come in so early.
So many experts on this board! Can someone tell me where the market is going to go over the next couple of months? What stocks should I buy? Should I short the index? Is the recession coming? How about the great ol' depression? Is DOW going back to 14000+ this year?
Day7793, I'll take a stab at what might be going on with you. Perhaps you bought up some property in the last 3 years...and now it looks you will have to wait longer than expected for appreciation. This maybe you didn't anticipate, therefore you do not want to hear any negative opinions on economy, but want to see the economy flourish and consumer confidence back so you can sell with a profit? Ok, even if you did buy at the highs, just rent out and wait for the appreciation. Like you say, housing always appreciated (in time)
but but the FED said that housing was contained like a year ago. Apparently the only thing contained was the psychology of the average public mind.
Best thing we could do is get rid of all government that can be privatized and make all people taxes, not just the top 1% who pay 40%. Bottom 50% don't pay any fed inc taxes, and no, SS tax is not fed income tax although it is spent as such. We have no accountablity in government because half the people, the socialist democratic voters don't pay any taxes and they get the free ride. John
We only need to look at the history of housing bubbles to get an idea of how long they take to recovery. This is by far the biggest housing bubble in US history. These things move very slowly. Anyone who thinks were near the bottom this soon needs their head checked.