BobS
Something should be said here about momentum when discussing economic or real estate cycles. We can study historical trends and, with the benefit of hindsight, graph long swings up and then down, generally lasting many years peak to peak, or trough to trough.
The latest figures confirm that the current downswing in housing prices is accelerating. We also know prices peaked in about mid to late 2005. Is it not logical that before anyone tries to call a bottom, we should at least see prices going down less fast?
There are so many factors that will contribute to the decline in 2008–factors that will actually reinforce one another and worsen the drop.
Anyone weighing the economics of buying now should add up the usual PITI, HOA & Mello Roos if applicable, the opportunity cost of the down payment (forgone interest income), the fixed transaction cost of buying spread out over the likely time of ownership, and maybe the moving costs if applicable. Translate that into a monthly figure. Then add in as a monthly cost 1% of the price, since that would be the likely drop in value of any house or condo you can expect in 2008.
