First off to answer a few inquiries, Where have I been? Been busy! Work, took a vacation and with the market pretty well settled there's just not that much interesting stuff to write about. The delusional sellers are pretty well gone now and that takes much of the fun out of it. So I will post when I can but feel free to comment about what's ever on your mind.
On to the topic.
There is a lot of talk about the housing double dip and prices falling another 10-20%, but will it? The problem with these reports is they are speaking about prices on a national level. You just cannot read a report like that and assume it will apply to your area. That would be like reading a weather report for Seattle and expecting it to be the same in Atlanta. So, will prices fall? I beleive in many areas there's still a lot of meat left of the bone. Just drive down to South OC or many parts of LA. The prices are still ridiculous and way out of line with incomes. The Northwest has not seen prices fall back to traditional levels. The Bay Area and much of the East Coast is still overpriced based on tradition price ratios. So yes, on a national level prices will probably fall 10 to 20%.
But what about our neck of the woods? THE IE! My gut feeling is that most of the IE is going to just stay flat. The high end and the few pockets where prices didn't fall all the way back may see some declines. There are many unknown factors that could push prices down. If unemployment skyrockets that would obviously hurt. But overall prices in the IE are back close to traditional levels of income to median price and houses can be purchased and rented at a profit once again. That factor alone should keep the prices of the mid to low end homes stable. As long as some investor can buy a property and have it pencil out with a profit those homes will sell. If rents fall then prices could follow. But in the last year rents have stabilized and right now there is no shortage of renters.
What's the market like? Since the end of the tax credit the market has definitely slowed way down. Traffic at open houses is slow and the amount of multiple offers has fallen WAY down. I used to see 6 to 12 offers on anything nice I was looking at in the Spring. Now it's one or two.
The median listing price has fallen considerably in the last few months especially at the high end. I have noticed the listing prices in the areas I watch fall at least $50k. I have noticed homes taking longer to go pending and longer to close. Many of them are falling out of escrow. I can only assume the lenders are getting pickier. Even with the lower interest rates homes are just not selling near as fast. Of course now we have moved into the SLOOOW season. Far fewer people want to mess with moving over the holidays.
Where we heading? I feel the market in the IE is going to stay flat for quite a while. I don't think interest rates are going to move much. The fed is doing everything it can to keep them low because they know if they shoot up it will kill the market and cause another wave of defaults. So if you are waiting for prices to fall any farther I wish you luck. I just don't see that happening. However if you do plan to buy, make sure you plan to stay a while. Because prices are probably gonna be flat for at least 5 years, probably 10. But with rates low and prices closer to reasonable levels you can buy in most areas of the IE for less than you can rent a comparable place (if you have the DP).