Hey FSD, et. al. I still think that looking at prices is superficial… It wildly understates the current market. Anyone who buys at these prices (whether 1%, 5%, or 10% under the records) is still buying at the top of a cycle.
Who is buying and who isn’t selling? During the recent craze, any house which could be fixed up went up in price. Didn’t matter if it was near the highway, was on a tiny lot, had a commercial property behind it, etc. Current sales only reflect the houses which ACTUALLY sold. No one is buying a house if it has any flaws, unless it is 20-40% off market. Thus the good houses are selling and the problem properties are not. Public perception is moving to the negative but has not really gotten into the heads of the vast majority. This will excelerate the trend…
Again – don’t look at what prices are, look at inventory, real inventory (the huge number of houses under construction but not on the market) and people moving off the fence to the other side (like myself – sold my house and have been renting for 7 months). The vast majority of the buyers will wait it out.
Another point for exceleration: If you can’t sell your house, you can’t buy a house. Thus the move up, move down market is gone. Beleive it or not, there are still buyers who are buying and then trying to sell their old home. They generally either have the equity to do it, but when their houses will not sell and are empty (I see a lot of them now), they will take a reduced price to move the property.
I’m a numbers guy, but faced with little actual supportable data (the NAR and MLS are data disasters, the gov can’t tell the truth which will panic the market.) I think that we would be better served to look at market dynamics and put numbers on them. For example look at buyer sentiment, look at real inventory and attribute a cost factor and trend factor, interest rates, and time series analysis.
