OK, I’ll stick my neck out, 2001 prices are the floor and where we are headed, there will be variances due to location and condition. Anectdotal stories and scenarios about dying old men and yardwork are nice but not enough to be market force, just a catalyst to get us to 2001. It will get there, with these scenarios and others, some slower, some faster.
Now if you are in that 90% that will still have a stable income and if you are in the even smaller percentage with a down payment, you need to vaccinate yourself agaonst the doomsdayers. Some of you have only seen one cycle, some were only paying attention during one cycle, and still others think this cycle is different. This cycle is no different, just larger and the best time to buy is when nobody in their right mind would. If you wait for things to turn around, you will have waited too long, don’t make the same mistake a 2005 buyer did, don’t ignore fundamentals because of hysteria.
Most piggies ingnored the “R/E always goes up” hype and looked at the fundamentals, things like rent multiplier, median qualifying income and loan types. We saw the flaw and the eventual downturn. Now when it hits 2001 pricing in your area or even 2001 inflation adjusted pricing, realize that you are dinking the other flavor of koolaid.
Bubble scenario “I cannot afford this house but I will buy it because the media and my friends say I should” BAD Choice
Bust Scenario “I can afford this house but I won’t buy because the media and my friends day I shouldn’t” Also a BAD Choice
Nor La made a good point, he isn’t seeing the devastation everyone is talking about and reporting at the ground level. I’ll bet he didn’t see the massive incomes during the bubble years. I also see this, it wasn’t as good when it was good and it isn’t as bad when it is bad, the trick is to profit from the hype.
I also read the financials daily and despite the horror stories, I was battling for the rent positive listings, buyers with cash are lined up, even in temecula, yet I never saw dead old men that hated yardwork, I wished I had but instead the cash rich folks were there. I waited and hoped they would stop coming but they never did, still haven’t.
You have until 2010 (or 2011 in premium areas) to get your downpayment and credit score together, that’s my prediction, when renting becomes more expensive than buying, the clock starts ticking.
