How’d I miss it…

There are now several noted economists who are calling the bottom of this recession, including ex-Fed Chairman Alan Greenspan, who must be taken with a grain of salt since he was a contributor to getting us into this economic mess. Most are still weasel-wording their claims, as economists are want to do, but they are saying that the recent upturn in housing sales and leveling off of price declines are indications that the worse is behind us. I sure hope that they are right about that and that we are indeed at or near the bottom – maybe even already on the up slope.

That brings us to the dilemma of many would-be buyers, who may have already missed the bottom. Do they look back on these days and say, “You know, I coulda bought that great house that I was looking at for a great price and I shoulda. Now I wish I woulda.” Things can change relatively quickly in real estate and many times they change in small increments that leave one looking back and seeing missed opportunities. There is not going to be a big “IT”S OVER” sign that suddenly crops up along side the road when this recession ends. There will likely be news reports and articles written, but those will happen weeks or months after the turn and after you have missed the bottom and the great deals.

Believe me, no one on the sell-side is going to hold back on any opportunity to start raising prices. The banks aren’t going to say, you know let’s just continue to sell these assets off and fire sale prices. And owners aren’t going to say, let’s continue to price as if we have to compete against depressed foreclosure prices. Once this thing starts back up the positive appreciation curve you will have missed the boat. A couple of things will happen fairly rapidly – the inventory will decline back down to a normal 6-9 month inventory level and prices will go up and become more stable and firm.

So, have you already missed the bottom? Maybe, but we are still fairly close to it. Inventory is going down and has been for about three months now. The drop in prices has slowed, if not turned to appreciation already. In Michigan we are through most of the mortgage-related foreclosure mess and are now working our way out of the job layoff foreclosures and uncertainly that froze the market for 2-3 months while GM and Chrysler and their suppliers worked their way through their bankruptcies. The dust hasn’t completely settled on that yet, but a clearer picture is emerging and people can start planning for the future again.

Foreclosure sales still dominate the market but they have fallen as a percentage of overall sales for three straight months and owner-occupied sales above $300,000 (the traditional move-up market) have picked up a bit. If you are a buyer or would-be buyer, this is the time to get in or end up with a bad case of the coulda, woulda, shouldas. If you are thinking of selling, you still need to come to grips with what happened to house values during this recession because it isn’t all going to come rushing back. It’
S going to take a decade or more to recoup the value lost on most homes; however, they are at least not going to continue to lose value like they have been. You need to price to the market and maybe a little ahead of he market, but you don’t necessarily need to bake in another 12-15% loss in value for the coming year.
So, you can stand on the dock and watch the boat sail over the horizon or you can jump on it now.
Buying or selling the tag line that is most applicable right now is from the Nike ad – Just do it!