Housing Market Limbo (The real estate market is cooling off and nobody is really arguing about that fact anymore.)
The numbers are in that home sales are down and prices are on the decline – facts that are set in stone.
Now that all of the industry insiders, analysts and forecasters have all come to terms about the slow market, they are now arguing about how bad things will get.
Can’t we all just get along?
A September 11, 2006 article by Lacey Rose of Forbes.com, “How low will real estate go?” looks into the various theories that experts have on the future of the housing market.
“Get used to it — the seller's market is closing up shop. The days of fat, fast home value increases are gone. Pack away those flipping fantasies. ‘The boom is definitely over, there's no debate about that,’ said Mark Zandi, chief economist of West Chester, Pa.-based research firm Moody's Economy.com. ‘Now the question is more how hard is it going to land, if it lands at all.’”
“The answer? Depends who you ask — and what location you're talking about. How to feel about it? Depends which side of the market you're on — and what location you're talking about.”
The numbers and figures that have been released lately make it difficult for anyone to be optimistic about the future of the market, regardless of what side they are on.
Regardless, some people are still doing business through rose colored glasses and are hoping for the best.
“‘One possibility is that you get a quick return to normal, which is what the economists for the realtor groups tend to hope for,’ said Edward Leamer, director of the UCLA Anderson Forecast. ‘But there's nothing in the historical record that suggests that we're going to get a return to normal anytime soon. It is a question of whether it is deep and quick or not so deep and much longer,’ Leamer added. His prediction: ‘Not so deep and rather long.’”
Whatever people are saying does not really matter in comparison to the hard data. The facts are the only thing we can really rely on when predicting what is going to happen to the real estate market.
“Whatever the future holds, the present doesn't look good. The number of unsold homes on the market rose another 3.2 percent in July to 3.9 million, a 13-year high, according to NAR. If the current selling rate held steady, it would take 7.3 months for all of those houses to move.”
It seems as if buyers and sellers seem to be in a lock and neither will budge. Buyers are waiting around on the margins for prices to go down, and sellers are holding their ground and not budging with their prices.
“Many property owners are reluctant to cut their prices. Unlike builders, who are so desperate to sell their properties that some are throwing in extras like upgraded countertops and one-week vacations, many sellers are willing to wait. On the other side of the equation are the buyers, equally strong-willed. Unwilling to fork over those sums in a wavering market, they are watching from the sidelines, waiting for prices to drop.
Back to Articles | 
