[quote=scaredycat]i dont really believe people generally are scared. Other than me. the thing I hear from ordinary people is that now is a great time to buy. People are in shock that I don’t already have a mortgage and look at me like I’mc razy for not buying immediately. I don’t even see that much negativity in the media, and that if the financing were there, people would jump on housing. I am not one to shy away from a gamble, I understand going against the flow, I’ve even sometimes made a bit of money doing just that, but i don’t think buying a house right now is going against the flow. i think people still want to flow that way. and i think it’s not really about buying at the bottom, it’s about not immediately being underwater because it limits the ability to move. maybe this is the time to buy, maybe this is the “blood on the streets” that signifies the time when the brave step upa dn the fearful step aside. .[/quote]
Agree with you and the other, more-bearish posters.
Not saying that those who are buying for 50-70% off peak are crazy. They aren’t. There are plenty of “lifestyle” reasons to buy in the more depressed areas, but there’s no denying (in my mind) that there are many reasons to remain bearish:
-Where will new, higher-paying, stable jobs come from?
–What about all those people who are not paying their mortgages (and we’ve met plenty of these folks, too)? IMHO, this is the elephant in the room.
-Right now, our water supplier is consistently talking about radical water rationing. What happens to housing prices then?
-For as long as people are allowed to live in homes they aren’t paying for, neighborhoods will remain unstable. You never know if it’s going to improve or decay.
-As the OP mentioned further up, many of today’s sales are going to investors — either flippers (long and short-term) or “buy and hold” landlords. IMHO, for as long as these homes are not being sold to long-term owner occupiers, there is the potential for further declines in rents (as more homes are listed as rentals) and sales prices (as flippers are foreclosed on).
-During the last cycle, you would see houses going into foreclosure over and over again, as the supposedly “smart” money was coming in for a bargain…way too early. I think this is just one (of many?) bear market rallys in housing.
-As another OP mentioned, none of the prices or interest rates are market-based. Unless the govt intends to stay in the banking/real estate business indefinitely, things could get interesting if prices of housing and money are ever allowed to float freely.
-Then there’s the demographic argument. Will Baby Boomers become net sellers for the first time in many decades, as they face decimated retirement plans/pensions, and need to take what they can get from their houses and move to cheaper locales?
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All that being said, there are still reasons to buy IF the buyer is 90% sure about their job security and future pay, and IF they are buying homes that have already fallen 50%+.
