Mercedes things are really tough to predict right now because of the slush factor. I have coined that term because things are slushy to me and nothing really seems to be as it is. We have talked alot about the subsidized market through mechanisms such as squeezing inventory, govt incentives for homebuyers, and low interest rates. No way those things are going to abate. My money is that our esteemed leaders will follow up with another buyers incentive. I think it is a foolhearty waste of my tax dollars but that doesn’t matter. Conversely I do not see unemployment abating however I think it will flatten out. Still I know ALOT of good friends out of work. Plenty of engineers out of work right now. Lots of foreclosures coming as well but it seems like the govt and wall st have developed a methodology of being able to trickle inventory out. Can that continue?
So this post is a rerun of course.
Where you are looking factors into the equation. Your price range is in the think of where ALOT of other people are looking. Going back to your question, and applying it to say PQ. Will PQ drop back to where it was 9 months ago? Will it go lower? I think the answer can be yes to both HOWEVER not under current conditions. If mortgage rates are at 9% then yes it can happen.
For sure do not overestimate the cash factor. As many cash deals as there have been on the market, overall they are still a VERY small percentage. There was another post about cash buyers or flippers swooping in on the market if prices go lower. I could not disagree more. That activity is happening here and now. About flippers, the ones that do it seriously, the big boys that are backed by serious investment money do not buy homes from realtors on the MLS. They buy them in bulk and they buy them at the trustee sales. There are people who buy homes for cash. Yes. We sold a condo in Kearny Mesa last month for cash and the couple that bought it were an Asian couple in LA who had purchased 4 already. Still though, if you look at stats of closed sales, especially 400-500k detached homes, no way are cash deals a large component.
Anyways, sorry I cannot give you the majority of the depreciation answer. I will say yes but ONLY if interest rates can be kept tolerable and honestly I just do not see how that can happen. However to me that will not happen for awhile yet. There is still the fact that our creditors have to finally say ENOUGH TO AMERICAN DEBT!
