My New Blog

People are anxiously waiting for this housing decline to bottom out.  I know I will be glad.  I hate being the guy letting people know their house declined in value so that they owe more on their house than what it is worth.  I don't like being the bearer of bad news.

So the big question remains, "How long?"  The answer is, "No one knows."  Some of this will depend upon how long and how deep this recession lasts.  Unfortunately 2.8% of U.S. mortgages are now at least three months in arrears, up from 1.4% a year ago.  That rate is projected to peak in early 2009.  That is according to a new CNN report.  That's not good news. 

Also if this recession lasts more than three quarters and people loose their jobs it could be a lousy year for real estate.  And S&P/Case-Shiller home price index which tracts income and housing values believes that we are in for a 20% decline in home prices next year.  Another forecaster is looking at a 15% decline.  The fact is it can't help but decline.  The supply is too high, and the demand is too low.  It's basic economics.

So what do you do, if you have to sell?

• Wait it out.
• Make your place shine if you intend to sell.
• Price it below market to get people to look at it and buy it.

If you are buying....

• Look for home that have been listed a long time and drive a hard bargain.
• Improve your credit score.

It's just plain ugly.  The good news is that in some areas of the country activity is picking up because of the reduced prices.  And remember all real estate is local, so my advice is talk to a good appraiser to give you the scoop on what is really happening in the local market.  And PLEASE before you buy a house get it appraised to make sure you are not paying more than you should.  You hire the appraiser, and do it BEFORE you make an offer.  You could save thousands, and in this market that could be really important.