Allow me to give you my thoughts on what the housing market forecast is for the remainder of 2009.
So far this year, I have heard unbridled optimism from many hopeful sellers, agents, and investors, believing that the market and values cannot possibly stay down any longer.
On the other hand, some experts and real estate professionals predict another Great Depression that will last 10 years or longer.
They base this on the fact that the real estate bubble was allowed to grow so much larger than ever before, the ramifications of it popping have got to be all the more severe.
I agree that the housing market will probably be worse than it has in the last half century, but I don't believe it will be the next Great Depression, for the following three reasons.
Reason #1: If you remember the Depression, many investors lost 100% of their profits, and banks were forced to go out of business.
That is because the nature of the stock market is that you have to buy stock for whatever its current value is.
Real estate, on the other hand, still has value, and will someday regain the value it had in the past.
No one's property has "gone out of business.
" They are still there, and as long as they are not sold or caused undue expenses, have not even generated a loss for their owners.
Reason #2: There is no national real estate market.
For this reason, no one (including myself) is qualified to predict what will happen in every city and county in the United States.
Real estate markets are local, and although the market may be cold in the majority of places at one time, your location might be stable or even appreciating.
However, in general, I predict that it will take several more years of slow decline or flatlining before values begin to pick up again.
This has been the case during the last two market cycles as well.
Reason #3: Real estate values in many places are still going down, though much, much more slowly than they have declined before.
I believe that this is causing many people to believe that things are not as bad as they were before, or that the market is improving already.
For these three reasons, my housing market forecast for 2009 is that prices will flatline or continue to decline slowly in many metropolitan areas, and begin to pick up again in three to four years.
So far this year, I have heard unbridled optimism from many hopeful sellers, agents, and investors, believing that the market and values cannot possibly stay down any longer.
On the other hand, some experts and real estate professionals predict another Great Depression that will last 10 years or longer.
They base this on the fact that the real estate bubble was allowed to grow so much larger than ever before, the ramifications of it popping have got to be all the more severe.
I agree that the housing market will probably be worse than it has in the last half century, but I don't believe it will be the next Great Depression, for the following three reasons.
Reason #1: If you remember the Depression, many investors lost 100% of their profits, and banks were forced to go out of business.
That is because the nature of the stock market is that you have to buy stock for whatever its current value is.
Real estate, on the other hand, still has value, and will someday regain the value it had in the past.
No one's property has "gone out of business.
" They are still there, and as long as they are not sold or caused undue expenses, have not even generated a loss for their owners.
Reason #2: There is no national real estate market.
For this reason, no one (including myself) is qualified to predict what will happen in every city and county in the United States.
Real estate markets are local, and although the market may be cold in the majority of places at one time, your location might be stable or even appreciating.
However, in general, I predict that it will take several more years of slow decline or flatlining before values begin to pick up again.
This has been the case during the last two market cycles as well.
Reason #3: Real estate values in many places are still going down, though much, much more slowly than they have declined before.
I believe that this is causing many people to believe that things are not as bad as they were before, or that the market is improving already.
For these three reasons, my housing market forecast for 2009 is that prices will flatline or continue to decline slowly in many metropolitan areas, and begin to pick up again in three to four years.