There are (at least) two factors to consider in this downturn – prices and time
A number of posters do price analysis based on the idea that investors will swoop in and put a floor under prices at some point
I like to think that I am one of the investors being referred to (since I certainly intend to swoop in when prices are right) and I can assure you that I WON’T be buying prior to 2010/2011
If property prices dropped to 100 times rents tomorrow I still wouldn’t be buying – we aren’t anywhere near a bottom so 100 times rents tomorrow would suggest to me that we were headed for 75 times rents in 2011/2012 – and I expect monthly rents to be lower at that point not higher
Are there investors that will buy at 150 times rents? Sure.
Will smart investors buy at 150 times rents prior to 2010? I don’t think so.
Time will tell …
[yes, I know that 75 times rents is ludicrously low – I also know that there is some serious economic doo-doo going on right now that has the potential to dramatically change the way real estate is valued – don’t be a knife-catcher!]
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GarySears – hold out for an SFR if you can – much more bang for your housing buck than a condo
