Monday, March 13, 2006

I’ll Decide when its a Buyer’s Market

The real estate industry seems to have a number of buzzwords and clichés for the state of the current market. Although few Realtors will admit that prices have stagnated, many are quick to point out that the market has switched from a seller’s market to a buyer’s market. In the context of the 5 year boom in housing prices, the contention that all of a sudden, the market now favors buyers is idiotic. At best, prices in most areas of the country have been flat to slightly down for only about six months, maybe nine months at the most. This is a good start for buyers, however, until prices start to noticeably trend down, I would not call this a buyers market. In my opinion, a more favorable buyer’s market will be noticeable when the price comparisons are down at least 10% year-over-year, which I don’t expect to happen until the third quarter of 2006 at the earliest. However, even if the price declines are noticeable, it should be up to the buyer to decide if it’s a buyers market and not the opinion of an addled Realtor desperate for a sale.

4 Comments:

Blogger grim said...

Neither a buyers nor sellers market be..

It is, most decidedly, a fools market.

Caveat Emptor!
Grim

Tuesday, March 14, 2006 8:27:00 AM  
Blogger chicagofinance said...

Silver:

According to my colleague's sister, it is a "normal" market, with equal amounts of buyers and sellers, and a backlog of inventory of roughly 6 months. This situation is how it should be, but my personal feeling is that it will substantially deteriorate from here.

chicago

Tuesday, March 14, 2006 10:24:00 AM  
Anonymous rbyzell said...

i just have a feeling that it won't really be a "true" buyer's market until rates hit 7.25 to 7.50 or, until there's a new president. but we'll see. there are some great deals out there now, but there is still to much unrealistic assumptions by sellers.

Tuesday, March 14, 2006 11:59:00 AM  
Blogger lindsey said...

Prices may not have started down yet, but even the NAR can see what's going on with activity.

David Lereah's numbers are beginning to crunch back. The National Association of Realtors® chief economist predicted a slow down in the market in January. He saw further declines in February. March is more of the same.
NAR Existing home sales decline prediction:

January -- 4.4 percent
February -- 4.7 percent
March -- 5.7 percent

NAR new home sales decline prediction

January --6 percent
Feburary -- 8.5 percent
March -- 7.7 percent (10,000 sales more than last month expected)

Existing home sales outpace new home sales by a factor of roughly 6-1.

On the plus side, Lereah sees more housing starts then previously expected.

Housing starts decline predictions:
January -- 6.3 percent
February -- 9.4 percent
March -- 4.3 percent

Lereah stayed with his mortgage interest rate prediction of 6.9 percent by year end.

Despite the declines in sales activity, median home prices are still predicted to rise. Apparently, the laws of supply and demand don't apply to housing.

Tuesday, March 14, 2006 12:17:00 PM  

Post a Comment

<< Home