It doesn’t make sense that prices have bottomed; either decent houses are priced out of reach of most normal incomes, or houses that are priced within normal incomes are scarce on the ground ’cause the “cash investors” got them all.
I think the main reasons prices aren’t going lower is just that the system is locked up. Few people are selling at any reasonable price because most people are underwater in their houses. Few can afford to buy at the price most people need to stay above water, so sales (of higher-priced dwellings) are moribund.
The only thing that would spring these underwater houses loose into the market is (1) mortgage cramdowns for the borrowers, so they could sell at a lower price, or (2) if they are delinquent they are foreclosed upon and the house is then sold for whatever the market will pay for it. Banks/Congress/State Assembly/county dogcatcher have taken every superhuman effort possible to prevent either (1) or (2) so we are in lockup. This is NOT the same as a normal “bottom”.
There are huge downward pressures on housing prices in the fundamentals arena (incomes, unemployment, NODs, unlisted deliquencies, etc) so I don’t think this is a stable situation either. The Fed and Treasury can blow only so much money at the situation then something’s gotta give.
I know it is wicked frustrating; I myself have chronic neck cramps from the frustration. But my gut says, “not now”.
Arraya, thanks for the heads-up, I sent it to my friend who is a small business owner and has already seen his line of credit cut. Gives validation to my gut, too.
