“True, some buyers which (sic) bought at the top of the housing market are hurting. But for the vast majority of homeowners, perhaps the adage “house prices have fallen to levels most never thought they would get up to” is most applicable! Is a mild decline in house prices after years of record-setting advances really that destructive for most homeowners?”
– Wells Capital Management, Economic and Market Perspective, September 2007 (pdf file)
Sellers aren’t desperate enough just yet. This time next year, it will be a different story. When houses really need to sell, prices come down.
Joe,
I find this analogy an accurate accounting of the current situation. I have clients who will make money no matter what (but would have made more one or two years ago). Clients who bought and sold within this past year and made money (OMG!), clients who bought last year and are now selling for a loss or “break even” due to their own personal situations etc… It’s all over the board, just as any year in real estate I suppose.
I bought this year for at least a 5 year home and will do fine. If I had to sell tomorrow on this particular property, I’d easily make money.
But seriously, I’ve had clients’ with their underwear all bunched up when they make $50K rather than $65K like the guy that sold last year. I’ve also got the biggest re-sale numbers in two large buildings this year… so there you go.
Facts are facts, some homes are going up, some are going down. But it’s pinned to the indiviual property and neighborhood. End of story.
I guess I’m tired of the sweeping generalizations. Sure, there are a lot of ill conceived developments dying on the vine, investors taking a hit, lenders cutting off the 100% financing for low net buyers etc… in the real estate sector. But this change happened in dot.coms and in any other number of sectors. Yet we still own, we still trade, we still invest in sound purchases every year.
Real estate is different. Treat it purely as an investment, and it will treat you like an investor exposed to markets. But grasshopper, treat real estate as your home and it will love you back.