The $20 Cabbage Patch dolls that once sold for almost $1000 are slowly coming back down their original market price. Ther e’s a ton of inventory and nobody’s waiting in lines out the door to purchase one. High supply, low demand = lower prices.
Buying now would not be prudent in my estimation. Truly, I say to you, that there have been and will be many more, attempts by various factions to keep home prices from declining too fast and keep home sales strong. There are too many people that depend on it staying this way. Interest rate deductions, continued soft-landing arguments and rhetoric in the media, reduction in other commodities such as gas, etc. Yes, it sounds like a conspiracy theory, but those that can have some control of the markets by sheer purchase or production power have it in their best interests to keep the American consumer machine from seizing up.
I find it ironic that all of a sudden the effects of Katrina, the corroded pipeline in Alaska, and Mid East turmoil have had no effect on oil prices. It’s as though they have all been swept under the rug. For a number of years there it seems that if a bee farted in a whirlwind, the price of oil increased due to fears of a refinery going down. Now everything is hunky-dory. I think that there is interest by some groups out there to use this to offset the effects of the cooling housing market, improve Republican standing before the mid-term elections, and boost savings prior to the upcoming Christmas season. They’ve got to keep the ol’ consumption pump primed…can’t let the fuel (spending)levels get too low.
The best way to combat high, slowly-decreasing home prices in your market is to do business with their competition: rental units or moving to another market. As I’ve said before, we plan on giving the SoCal market a couple years to come back down to affordable levels. If is does not, we will move to Colorado or some other more affordable market where we can raise a family in a nice home with a nice yard and wave to our neighbors as we are mowing our big backyard.
