Snip from an article titled “What to watch for in ’07”:
The Housing Bubble
Housing prices should bottom out later this year, says the NABE survey, and, of course, there’s no way to know how soon prices will rebound.
What to do. If you have a 5/1 hybrid adjustable-rate mortgage, which has a fixed rate for five years before turning into a variable rate, you can sit tight, especially if you think you’ll move before it adjusts. If your ARM payments are already climbing or you opted for a mortgage that doesn’t reduce the principal, refinance to a 3/1 hybrid. Try your current lender first; it might be willing to streamline the process and keep fees low. Finally, if you are selling soon, get real about th price and forget about that whopping profit your former neighbor made just last year.
Commentary: I assume the NABE survey they refer to are the National Association of Business Economics? When I googled it I also came up with the National Association for Bilingual Education (this is the number 1 hit, actually, and it would probably make more sense) and the National Association of Bar Executives. Whoever NABE is, Consumer Reports seems to value their opinon highly enough to also be unquestionably calling a bottom in real estate prices.
I love the Consumer Reports magazine, but this call is up there with Lereah’s in my opinion.
Pencil: I think that the NABE (Business EconomiSTS) refers to national prices hitting bottom later in 2007. That may be true. However, bubbly areas like San Diego will probably fall for another couple of years before prices flatten and stay the same for some time.
The above is for nominal prices. In inflation-adjusted terms, we are still far, far from reaching the bottom in San Diego. Buying a house here before 2009 is nuts IMO.
I’d buy tomorrow …. if the property made economic sense.
But nothing makes economice sense in R.E. anymore. It’s not about whether or not R.E. will return to historical norms in 1 year or 3 years or 5 years or 10 years. Everyone has an opinion but, no one can tell you for sure when it will be.
My aim is to evaluate a property, and know for sure if it’s reasonable for me to risk my money.
Here’s the link to a software program I use to evaluate properties …
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