I always said that the same Psychological force, fueled by insane mortgage lending practices, created the huge upside of home pricing in the past years will be the same sending home pricing to insanely low prices, but this time fueled by foreclosures. That force was the idea that if you did not buy this month, you would be locked out of housing forever. On the downside, the force will be the idea that if you buy today, next month the prices will be cheaper. No one wants to overpay, specially when you can see the guy who paid less next door every day for the rest of your life. The housing market will start to rebound, and you will get great low prices, when generally speaking, no one thinks that housing will ever recover. A day will come when people will truely give up the idea that this market will ever recover, which it will, but that is the bottom. When people truely give up, that is when you buy! When you hear, “wow, can you believe how little someone paid for the home or condo next door? That’s insane” With fear or disgust in their eyes. Get ready to pull the trigger!
