Prices have fallen to levels in many parts of the county where people had at least some level of belief in the fundamentals behind them and are starting to re-enter the market. Builders have cancelled numerous new projects, slowed down construction and cleared out alot of standing inventory (of course there are some exceptions). This Spring could hold together before we get another healthy price slashing between July 2007 and October 2007.

Nothing goes down or up in a straight line. If you follow something close enough, you’ll see dead cat bounce. That’s my theory. In regards to demand, I think buyer demand will always be there. The big question is, how much of those demand is from ABLE buyers. Right now, lending is still very relaxed, so the # of ABLE buyers are still high. But what if bank start to tighten lending requirement to the level it was in the early 90s. I think that will decrease # of ABLE buyers dramatically. Fed is still worry about inflation, hence the hold on rate instead of cutting. I think there are two things that will kick the decline into high gears: 1 is the jump in defaults. Which will then cause #2, the tightening of lending standard because of high default.

I’ll bet you won’t find it so hard to wait if the prices take another drop during Q1 2007.

ARRGGGHHHH! Stop with the median is down only X% so far. Enough already. You know better. You know its a useless measure. If you want an ounce of credibility start posting real examples you are seeing in the field. As an appraiser you see refis in addition to purchases. That is something of real value that you can provide not the same nonsense we get from the industry talking heads. We have enough babbling fools out there. Step up to the plate and truly add something of value. Tell us about how the values are coming in relative to prices paid the two to three years ago.

Or maybe, just maybe, Powayseller is wondering if by paying 8% in closing costs to sell their home, plus moving expenses twice, (at least twice – maybe more), plus the hassles of moving, and the loss of a tax advantage, that maybe they would have been better off by staying in their house, and continuing to pay down priciple on their loan, unless prices drop by a total of more than 12-15%, which may or may not happen. Also, resale prices on SFRs in Poway have not dropped by much at all up to this point.

Powayseller, I hope that things do work out for you – I think you will be able to tell when the market has bottomed out, whenever that is. But no one knows for sure how far prices will drop. There are too many variables, (strength or weakness of the national and local ecomomy, wars, long-term interest rates, inflation, etc.) But it could be a lot less than you predict.

We have indeed lost equity in our house in the last year, but I don’t care, because we’re not moving. I did cash out of two investment properties in the last two years, and paid the capital gains tax. If prices do drop by more than I think, it’s OK, because I have two daughters in their early to mid-20’s who may want to buy in the next three years or so – so it would be better for them.

sdrealtor – I wonder if you are talking crap about the market to your clients who are interested in buying. Let me guess – probably not. How can you let anyone buy if the future looks so bleak?

PS – Most people do end up paying 8% to sell their house, (6% commission plus another 2% in other costs) – If you did it in 4% – that’s great. If it is all working out for you, I’m honestly happy for you – I’m not doubting you. But not everyone timed it like you did by selling late in 2005.

If someone owns a condo that has already dropped by 20%, (some have, but not all), I think it’s too late to sell now. You might as well bite the bullet and hope for the best. And also, you have to admit that no one, even you, knows for sure what the market will be like in two years. All we can do is make our best educated guess and do what we think will work best for us.

About the stock market …. well, never mind.