Have Housing Prices Hit Bottom?
Is the worst of the housing market past us? I do question if this is the case.
Can prices go lower? Is recovery already here? My opinion is that the housing market has a long way to go before we can claim a bottom.
Until the government addresses that main problem of lost equity it is my opinion that we will continue to see foreclosure and consumer debt problems.
Remember that for 95% of the population their house is the largest investment they will ever make.
Currently these investments are down 20-30% or more in some areas.
For example if you owe $300,000 on a house and it is now only worth $200,000 its hard to argue a strategic walk-away.
I have had many clients ask me this question.
What to do? Overall values of homes might take 10 years to get back to the level they had been at over the previous 4-5 years when many people bought homes that are now "underwater".
Like any other investment if the value is decreasing you make the choice to hold or sell.
This decision is even harder when you are continuing to pay money towards a falling investment each and every month.
Until this issue is addresses I do not see recovery on the horizon.
Banks and lenders all made heavy profits while the cost of housing was doubling over a 10 year span, but now these same banks and lenders do not want to back down the principal of these loans to match up with the value of the house in hopes of a quick recovery.
I do not see this happening unfortunately.
Can prices go lower? Is recovery already here? My opinion is that the housing market has a long way to go before we can claim a bottom.
Until the government addresses that main problem of lost equity it is my opinion that we will continue to see foreclosure and consumer debt problems.
Remember that for 95% of the population their house is the largest investment they will ever make.
Currently these investments are down 20-30% or more in some areas.
For example if you owe $300,000 on a house and it is now only worth $200,000 its hard to argue a strategic walk-away.
I have had many clients ask me this question.
What to do? Overall values of homes might take 10 years to get back to the level they had been at over the previous 4-5 years when many people bought homes that are now "underwater".
Like any other investment if the value is decreasing you make the choice to hold or sell.
This decision is even harder when you are continuing to pay money towards a falling investment each and every month.
Until this issue is addresses I do not see recovery on the horizon.
Banks and lenders all made heavy profits while the cost of housing was doubling over a 10 year span, but now these same banks and lenders do not want to back down the principal of these loans to match up with the value of the house in hopes of a quick recovery.
I do not see this happening unfortunately.
