I think it will be like a bouncy rubber ball going down a long flight of steps.
Down up down a little more up down a little more up down up a little down alot back up down more.
One thing you must understand about markets in general is that they are where they are for a reason. Those reasons need to change in order for the market to change. Change is difficult and takes time.
Also, in a market where transaction time from “I think I’ll sell” to “closed” can take many months, that prevents anything from happening quickly.
I get the feeling people view the housing market like the stock market when they talk about bubbles bursting and such.
Lets see …
Stocks – millions of transactions a day, transaction time of 1 second.
Houses – hundreds of transactions a day, transaction time of 3 months.
How fast can it possibly move ?
The closest thing we had to a “pop” was the subprime market collapse. Still, the effects of that on the housing market wasn’t immediate. The effects of even a “pop” like that take months to fully affect the market.
Furthermore, you can’t short sell houses. The market has to drop by people not buying. The act of not buying is a passive act and doesn’t force the market down. It drops bit by bit as sellers reluctantly decide to lower prices.
Lastly, as Rich said in one of his recent posts – there are forces pushing the other way. They aren’t just going to disappear overnight.
They typical down months could be fairly dramatic – but the the Spring will always bring buyers who think the bottom is here and we’ll get little up bounces.
