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Real estate, still in denial...

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  • Real estate, still in denial...

    I have family members in real estate and they have real estate agents telling them, "its going to get better in 09" to just tough out this period and wait for the market to recover... I dont know if this is just denial or trying not to paint a bad picture???

  • #2
    Re: Real estate, still in denial...

    A managing partner at Prudential Realty?

    I'd check all fingers after shaking hands with one such as he.

    Key points for those thinking housing will 'turn around in the next few months':

    1) Are jobs being lost or gained?

    I find it extremely unlikely that unemployment is going to fall, much less fall significantly in the next few months

    2) Are loans easier or harder to get?

    Again, those who have money can get loans, those who haven't still can't. Those with negative equity especially can't. If the goal is to buy a super low end home, there might be some bounce there (dead cat), but in pretty much every other instance this is not going to hold true.

    3) Is the population outgrowing supply?

    It is estimated some 2% of all homes are now vacant. I'm pretty sure 2.2M households aren't going to be formed in the next 6 months - even were builders not still continuing to build

    But you can't stand between a sucker and a 'sure thing'

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    • #3
      Re: Real estate, still in denial...

      4) Are incomes rising or falling?

      Even excluding the unemployed average real incomes seem likely to fall.

      5) Are interest rates rising or falling?

      They're at all-time lows right now. Hard to see them falling any further.


      EJ's phrase: "the desperate optimism of the heavily invested" (or somesuch) comes to mind.

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