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cyphire
ParticipantIf they are planning to be there over 10 years and can easily afford to be there even if prices dropped in half – I would completely agree with you. In my own case I would be OK also – just pissed that I spent so much money on something which might not get back to that price for 10 or more years. I’m renting a house right now for $5,200 / month which would probably sell for 2.5M. I hate renting (it’s not my house which I am not used to) but can’t imagine rebuying a Carmel Valley house for 1.5M-2M which is the same as 20,000 other houses, each held together with spit and stucco, slapped together by crews, and which (in my opinion) will be under 1M within a few years. I also have a problem buying a 2500 foot house in La Jolla which looks like something Ozzie and Harriet owned and should cost $125,000 plus inflation for $2M…
The problem with the current market is that there is so much downward potential (just as there was a huge upside for no reason other than speculation and mass psychology).
And no offense… but…. I doubt that your business consists of 3 families wearing top hats and monocles who carry bags of cash around buying custom homes which they have searched for, for 3 years. This scenario somewhat smells to me. It sounds like my friend who claimed he always won at the track… every time… except of course when we went with him.
I am sitting on a pile of cash and I like most business people want to see at least a 0% increase on an asset. What I mean by this is that if I knew prices were stabilized but I wanted to own my home rather than rent, I might buy the house anyway. But most thinking people, without emotion, can see that the downside potential is enormous and the best case scenario (which I don’t believe) is that prices will stabilize and will slowly go up.
What about your more normal high-end buyers 70-80% mortgage, executive jobs, reasonable salary expectations… Are even this elite group ok with decreasing prices?
ParticipantIf they are planning to be there over 10 years and can easily afford to be there even if prices dropped in half – I would completely agree with you. In my own case I would be OK also – just pissed that I spent so much money on something which might not get back to that price for 10 or more years. I’m renting a house right now for $5,200 / month which would probably sell for 2.5M. I hate renting (it’s not my house which I am not used to) but can’t imagine rebuying a Carmel Valley house for 1.5M-2M which is the same as 20,000 other houses, each held together with spit and stucco, slapped together by crews, and which (in my opinion) will be under 1M within a few years. I also have a problem buying a 2500 foot house in La Jolla which looks like something Ozzie and Harriet owned and should cost $125,000 plus inflation for $2M…
The problem with the current market is that there is so much downward potential (just as there was a huge upside for no reason other than speculation and mass psychology).
And no offense… but…. I doubt that your business consists of 3 families wearing top hats and monocles who carry bags of cash around buying custom homes which they have searched for, for 3 years. This scenario somewhat smells to me. It sounds like my friend who claimed he always won at the track… every time… except of course when we went with him.
I am sitting on a pile of cash and I like most business people want to see at least a 0% increase on an asset. What I mean by this is that if I knew prices were stabilized but I wanted to own my home rather than rent, I might buy the house anyway. But most thinking people, without emotion, can see that the downside potential is enormous and the best case scenario (which I don’t believe) is that prices will stabilize and will slowly go up.
What about your more normal high-end buyers 70-80% mortgage, executive jobs, reasonable salary expectations… Are even this elite group ok with decreasing prices?
ParticipantI agree deadzone, I think that not only will prices go down to pre-2000 levels, I think they will go down to affordability. The baby boomers are selling, and there is too much pressure to the downside. The downward pressure (people that have to sell, retire, die) and the huge unfinished inventory will keep pushing down the resale market.
Buyers were only in the market because as sick as the prices are, they weren’t worried about price deflation. Realtors controlled all the data and the media. This is changing very rapidly. As prices keep slipping the Zillow’s, Trulia’s, and Redfin’s will keep adding tools and data. Folks are getting pissed that they can’t see actual selling data until way after the fact (months) if at all.
The buyers (like me) will sit on the sidelines as long as prices are even within 50% of where they are now as long as prices keep falling. Most people will not buy a generally overpriced asset if it doesn’t seem like it has an upside potential. Add to that the real estate commission and you have a poor deal unless the prices are going up. With falling prices comes loss of equity and inability to get out. Then the economy starts sucking wind like a pump without water.
This cycle will keep going down, there is no real stimulus which can prevent it.
ParticipantI agree deadzone, I think that not only will prices go down to pre-2000 levels, I think they will go down to affordability. The baby boomers are selling, and there is too much pressure to the downside. The downward pressure (people that have to sell, retire, die) and the huge unfinished inventory will keep pushing down the resale market.
Buyers were only in the market because as sick as the prices are, they weren’t worried about price deflation. Realtors controlled all the data and the media. This is changing very rapidly. As prices keep slipping the Zillow’s, Trulia’s, and Redfin’s will keep adding tools and data. Folks are getting pissed that they can’t see actual selling data until way after the fact (months) if at all.
The buyers (like me) will sit on the sidelines as long as prices are even within 50% of where they are now as long as prices keep falling. Most people will not buy a generally overpriced asset if it doesn’t seem like it has an upside potential. Add to that the real estate commission and you have a poor deal unless the prices are going up. With falling prices comes loss of equity and inability to get out. Then the economy starts sucking wind like a pump without water.
This cycle will keep going down, there is no real stimulus which can prevent it.
ParticipantSorry SDRealtor – I don’t agree that:
“A year from now, my clients will be happy with their purchases”
How can you say that? You don’t have a crystal ball that prices will be stabilized, just as you don’t know if they will descend to a normalized rate. Ultimately prices will go where prices will go. If prices do drop dramatically and stay low for a long time, many of your clients will be hurt, very hurt. If prices stay flat and don’t move a lot, only some of them will be hurt (they will find it an expensive proposition), and if prices go up even past our crazy levels then you will be vindicated.
Are you actually asking your clients “Are you prepared economically for a medium term loss of equity on your asset?”, “Are you prepared economically if you can’t sell as easy as you bought (because the buyers are on the sidelines)”, “If interest rates go up, are you in a mortgage which will be stable?” If you don’t ask these questions you are selling them a dream which has already been punctured. I might have missed something – but do they all know that some folks are calling a bubble and a downward trend? And that we have had these cycles here in SD before (but never with such magnitude to the upside).
My personal belief is that we will go right back to the inflation adusted line that we have had since 1890. It always returns to that line (actually goes below it but averages back to it). Why is it that most people just ignore history as if they are in some “golden age”?
Anyway, I hope you are telling your customers that you have no idea where the market is going, you only have your personal opinion. I would get it in writing that they understand this (a disclaimer)… While it’s true that Realtors have literally no ethics requirements (thats not to say that some realtors aren’t completely ethical and some aren’t) you should take some responsibility in the product you push.
I personally have an awesome friend / elder statesman who is a realtor. He’s been around the block for a very long time. His kids are realtors. He thinks that anyone buying a house right now is insane. He is still selling (or not selling!) (mostly high-end condos to very wealthy people), but he thinks that not only the housing market but the stock market is poised to fall and fall big. He is completely in cash right now, and I am 90% in cash right now.
One point that I can’t stress enough… The data SUCKS. We aren’t seeing selling prices, we are only seeing the houses that do sell!!! What about all the inventory which is just sitting there? If the only things selling right now are the ‘perfect’ properties (and selling at a somewhat discount), what about the time-lagging properties which couldn’t possibly sell at even todays prices with the buyers staying away?
Just my opinion and can we please keep these forums interesting without personally attacking anyone and name calling?
ParticipantSorry SDRealtor – I don’t agree that:
“A year from now, my clients will be happy with their purchases”
How can you say that? You don’t have a crystal ball that prices will be stabilized, just as you don’t know if they will descend to a normalized rate. Ultimately prices will go where prices will go. If prices do drop dramatically and stay low for a long time, many of your clients will be hurt, very hurt. If prices stay flat and don’t move a lot, only some of them will be hurt (they will find it an expensive proposition), and if prices go up even past our crazy levels then you will be vindicated.
Are you actually asking your clients “Are you prepared economically for a medium term loss of equity on your asset?”, “Are you prepared economically if you can’t sell as easy as you bought (because the buyers are on the sidelines)”, “If interest rates go up, are you in a mortgage which will be stable?” If you don’t ask these questions you are selling them a dream which has already been punctured. I might have missed something – but do they all know that some folks are calling a bubble and a downward trend? And that we have had these cycles here in SD before (but never with such magnitude to the upside).
My personal belief is that we will go right back to the inflation adusted line that we have had since 1890. It always returns to that line (actually goes below it but averages back to it). Why is it that most people just ignore history as if they are in some “golden age”?
Anyway, I hope you are telling your customers that you have no idea where the market is going, you only have your personal opinion. I would get it in writing that they understand this (a disclaimer)… While it’s true that Realtors have literally no ethics requirements (thats not to say that some realtors aren’t completely ethical and some aren’t) you should take some responsibility in the product you push.
I personally have an awesome friend / elder statesman who is a realtor. He’s been around the block for a very long time. His kids are realtors. He thinks that anyone buying a house right now is insane. He is still selling (or not selling!) (mostly high-end condos to very wealthy people), but he thinks that not only the housing market but the stock market is poised to fall and fall big. He is completely in cash right now, and I am 90% in cash right now.
One point that I can’t stress enough… The data SUCKS. We aren’t seeing selling prices, we are only seeing the houses that do sell!!! What about all the inventory which is just sitting there? If the only things selling right now are the ‘perfect’ properties (and selling at a somewhat discount), what about the time-lagging properties which couldn’t possibly sell at even todays prices with the buyers staying away?
Just my opinion and can we please keep these forums interesting without personally attacking anyone and name calling?
ParticipantMy reason for buying a house was that I had the money… We originally lived in NYC where my rent was $10,000 / month. The landlord let us out of our lease because the new people were willing to pay 13,000 / month. Thats when I left NYC! (lol). Bought in Carmel Valley at 810K, sold at 1.4M after 5 years. (We did however put in a new kitchen).
Even at inflated prices here in SD with prices going up I had no problem with making the decision. But I tend to be pretty risk adverse. I didn’t really care about 50-100K up or down – but my reason for buying was I thought I wanted 2 acres, pool, etc. but found it was a little too isolated for me. Would still be there but my daughter started a private school and it was just too far to commute and I didn’t want her taking a bus which left at 6:30am. If I felt that there was stability in the market and the house would hold it’s value I might still be there – commute be damned… But the combination of my feeling that the market wasn’t just tipping, it started to come down big time made me put the house on the market. I think I just managed to get out under the wire….
The house we bought was 2M$ and 4800sqft. We bought in July 04 and set a new price per square foot record in the neighborhood. But of course each house sold for the next year (up to late 2005) kept going up in price. My neighbors had a house with a slightly better view and a sports court, they sold for 2.5M in late 2005.
My sale in Dec 06 brought 2,050,000 which was 50K more than I bought for – so I didnt lose money… If you count in the real estate commission, then yes I lost 30K – but I paid 3.5%, not 6 percent like some people. Two neighbors would not drop their prices and the houses just sat there. Finally one dropped their price to 2,100,000 – comp wise the house was at least 50K worth more than ours – the other is just sitting there and now has company. They are still listing at 2,195,000 – and they aren’t selling.
Everyone’s story is different. If I was spending a good chunk of my income to pay the mortgage – I would have been freaking out. But I could afford to win or lose with the house – it wouldn’t dramatically change my lifestyle. What really freaks me out is that people buy houses they can’t afford. They buy houses without researching the market and without the financial backup which I have. If their house drops in value, they lose their job, they get sick, they get divorced, they have just screwed up their financial present and future.
Anyway – I was able to easily afford the risk I took – which is not the norm in this market where the average house can only be afforded by 10% of the population.
ParticipantMy reason for buying a house was that I had the money… We originally lived in NYC where my rent was $10,000 / month. The landlord let us out of our lease because the new people were willing to pay 13,000 / month. Thats when I left NYC! (lol). Bought in Carmel Valley at 810K, sold at 1.4M after 5 years. (We did however put in a new kitchen).
Even at inflated prices here in SD with prices going up I had no problem with making the decision. But I tend to be pretty risk adverse. I didn’t really care about 50-100K up or down – but my reason for buying was I thought I wanted 2 acres, pool, etc. but found it was a little too isolated for me. Would still be there but my daughter started a private school and it was just too far to commute and I didn’t want her taking a bus which left at 6:30am. If I felt that there was stability in the market and the house would hold it’s value I might still be there – commute be damned… But the combination of my feeling that the market wasn’t just tipping, it started to come down big time made me put the house on the market. I think I just managed to get out under the wire….
The house we bought was 2M$ and 4800sqft. We bought in July 04 and set a new price per square foot record in the neighborhood. But of course each house sold for the next year (up to late 2005) kept going up in price. My neighbors had a house with a slightly better view and a sports court, they sold for 2.5M in late 2005.
My sale in Dec 06 brought 2,050,000 which was 50K more than I bought for – so I didnt lose money… If you count in the real estate commission, then yes I lost 30K – but I paid 3.5%, not 6 percent like some people. Two neighbors would not drop their prices and the houses just sat there. Finally one dropped their price to 2,100,000 – comp wise the house was at least 50K worth more than ours – the other is just sitting there and now has company. They are still listing at 2,195,000 – and they aren’t selling.
Everyone’s story is different. If I was spending a good chunk of my income to pay the mortgage – I would have been freaking out. But I could afford to win or lose with the house – it wouldn’t dramatically change my lifestyle. What really freaks me out is that people buy houses they can’t afford. They buy houses without researching the market and without the financial backup which I have. If their house drops in value, they lose their job, they get sick, they get divorced, they have just screwed up their financial present and future.
Anyway – I was able to easily afford the risk I took – which is not the norm in this market where the average house can only be afforded by 10% of the population.
ParticipantThanks PerryChase…
I agree – no summer surge – I expect a summer bummer… User psychology will show that as economic, interest rates, weakened dollar, etc. data gets worse, more buyers will not risk buying at the current hugely inflated prices.
I think you misread my post about buying – I am absolutely not going to buy for at least 2 years, and maybe beyond that. I will buy when I feel that the possible downside (which I think is huge right now) is somewhat aligned with possible upside. There is NO way that prices will start appreciating in the next 2 years. Even believing that they will be flat is crazy. There is way, way, way too many problems in the RE market, not the least of which is the time lag in selling properties. If this was the stock market, we could see a crash in 1 day. With RE it is ALWAYS lagging. We only see prices on the houses which do sell, not the vast majority which either cannot sell, will take a huge time and huge reductions to sell, or have been withdrawn from the market – but will come back on the market in 1, 2, or 4 years based on eveyone realizing that there is a bubble, was a bubble, and prices are retreating.
I think that folks will be kicking themselves for not getting out now at any somewhat reasonable price (2003-2004 prices). It’s only getting worse and it will continue.
It’s amazing how cycles, bubbles, and the psychology of the herd always ALWAYS pan out. When the tech stocks crashed some smart folks sold out at 60-80% of the highs… Others refused to take the profit and rode it all the way down to 1-5% of the high. (Example Corning Glass Works $100 stock went down to 2$)… If you bought at $20 and sold at $50 you still would have a 30$ profit.. If you didn’t you were greedy. I wasn’t a smart person (but not completely stupid!!!) – I bought at $100 and sold at $18!!! But if I had been on 50% margin I would have lost everything when it hit $50. This is similar to the housing bubble. Here in LJ prices went up 257%…. If you bought a house at 300K and can’t sell it at 1.4M, sell it at 1.2M!!!! In a year you won’t be able to sell it at 1.1M and you will finally sell at 900K.
This is also paralleled in the equity situation. Homes are usually hugely leveraged… A 1M$ home which has 30%-40% equity will have 0 equity if prices come down 30%… If prices are heading downwards – unless you are going to ride out the cycle (which will be 3-8 years – I’m betting on 6 years heading downward with 10-12 years to get back to 2004), you are going to be upside down.
Anyway – no one has a crystal ball, but as most people own homes and most want to own homes, there are blinders on and the market psychology will be the telling factor…
ParticipantThanks PerryChase…
I agree – no summer surge – I expect a summer bummer… User psychology will show that as economic, interest rates, weakened dollar, etc. data gets worse, more buyers will not risk buying at the current hugely inflated prices.
I think you misread my post about buying – I am absolutely not going to buy for at least 2 years, and maybe beyond that. I will buy when I feel that the possible downside (which I think is huge right now) is somewhat aligned with possible upside. There is NO way that prices will start appreciating in the next 2 years. Even believing that they will be flat is crazy. There is way, way, way too many problems in the RE market, not the least of which is the time lag in selling properties. If this was the stock market, we could see a crash in 1 day. With RE it is ALWAYS lagging. We only see prices on the houses which do sell, not the vast majority which either cannot sell, will take a huge time and huge reductions to sell, or have been withdrawn from the market – but will come back on the market in 1, 2, or 4 years based on eveyone realizing that there is a bubble, was a bubble, and prices are retreating.
I think that folks will be kicking themselves for not getting out now at any somewhat reasonable price (2003-2004 prices). It’s only getting worse and it will continue.
It’s amazing how cycles, bubbles, and the psychology of the herd always ALWAYS pan out. When the tech stocks crashed some smart folks sold out at 60-80% of the highs… Others refused to take the profit and rode it all the way down to 1-5% of the high. (Example Corning Glass Works $100 stock went down to 2$)… If you bought at $20 and sold at $50 you still would have a 30$ profit.. If you didn’t you were greedy. I wasn’t a smart person (but not completely stupid!!!) – I bought at $100 and sold at $18!!! But if I had been on 50% margin I would have lost everything when it hit $50. This is similar to the housing bubble. Here in LJ prices went up 257%…. If you bought a house at 300K and can’t sell it at 1.4M, sell it at 1.2M!!!! In a year you won’t be able to sell it at 1.1M and you will finally sell at 900K.
This is also paralleled in the equity situation. Homes are usually hugely leveraged… A 1M$ home which has 30%-40% equity will have 0 equity if prices come down 30%… If prices are heading downwards – unless you are going to ride out the cycle (which will be 3-8 years – I’m betting on 6 years heading downward with 10-12 years to get back to 2004), you are going to be upside down.
Anyway – no one has a crystal ball, but as most people own homes and most want to own homes, there are blinders on and the market psychology will be the telling factor…
ParticipantI’m living here in La Jolla (renting – sold my house in North County last December)…
My wife and I constantly are looking at the homes for sale here in La Jolla. It’s a weird market. It can’t be looked at easily as it is VERY segmented… If it is a great property, big dollars (over 3M$) it’s a whole other ball game – has very, very little to do with the RE bubble. These homes are purchased by older people, wealthy people, people who have made huge money during the current administration. These people are not working 9-5 for a company and trying to handle a mortgage, their purchases have nothing to do with real estate values or anticipated values. They buy because they can, and if the house goes up or down in price it is not going to change their lives.
If the price is 2.5M or under, prices have come down dramatically, they are taking longer to sell, and the vast majority of the houses are pretty terrible. It’s hard to purchase a tiny house on a busy road for a millon dollars. Just not worth it. Even the realtors have a tough time talking about how wonderful the properties are at these prices – no level of salesmanship can sell a crappy 1950-70’s house for 1.3-2 million dollars while the short, medium and long term risk for appreciation is so significant.
All the houses here in La Jolla with flaws (too small, under renovated, over renovated, too near noise, too near construction, too expensive, smelly, mouldy, etc.) aren’t selling… they are sitting on the market or are being taken off the market. As the only houses which still sell easily are ones which are in the minority (the nice houses, near nice houses, renovated, real ocean views), this keeps prices for La Jolla high, but isn’t real world when you look at the vast majority of houses which don’t or can’t sell.
If you want a $3M – $25M property you really don’t care about bubbles!!! A neighbor is in the building business – he paid $15M for a house which was on the market for a long time at $25M. This isn’t reality for most people…
The only way to really see what is happening is to look at houses which are on the market, have been taken off the market, and look at strata (houses under 1200 ft, under 2000 feet, under 2500 feet, over 3000 feet), and look at by specific neighborhood. Birdrock is nothing like the summit, Upper hermosa isn’t the same as on the beach… Look within strata and you will see some massive changes in both directions!
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Personal note: We almost closed on a 1.8M house here which would have been 1.2M in Carmel Valley, 600K in the East County, or $325K anywhere in the USA… When we decided that it would be insane to take that level of risk based on what the market is doing – I thought the realtor would was going to have a heart attack… It’s tough out there right now!
p.s. Some houses which were renovated and were trying to be flipped are coming on as rentals, there is a lot of both fear and desperation in this town, but not with the folks overlooking the water in private compounds….
ParticipantI’m living here in La Jolla (renting – sold my house in North County last December)…
My wife and I constantly are looking at the homes for sale here in La Jolla. It’s a weird market. It can’t be looked at easily as it is VERY segmented… If it is a great property, big dollars (over 3M$) it’s a whole other ball game – has very, very little to do with the RE bubble. These homes are purchased by older people, wealthy people, people who have made huge money during the current administration. These people are not working 9-5 for a company and trying to handle a mortgage, their purchases have nothing to do with real estate values or anticipated values. They buy because they can, and if the house goes up or down in price it is not going to change their lives.
If the price is 2.5M or under, prices have come down dramatically, they are taking longer to sell, and the vast majority of the houses are pretty terrible. It’s hard to purchase a tiny house on a busy road for a millon dollars. Just not worth it. Even the realtors have a tough time talking about how wonderful the properties are at these prices – no level of salesmanship can sell a crappy 1950-70’s house for 1.3-2 million dollars while the short, medium and long term risk for appreciation is so significant.
All the houses here in La Jolla with flaws (too small, under renovated, over renovated, too near noise, too near construction, too expensive, smelly, mouldy, etc.) aren’t selling… they are sitting on the market or are being taken off the market. As the only houses which still sell easily are ones which are in the minority (the nice houses, near nice houses, renovated, real ocean views), this keeps prices for La Jolla high, but isn’t real world when you look at the vast majority of houses which don’t or can’t sell.
If you want a $3M – $25M property you really don’t care about bubbles!!! A neighbor is in the building business – he paid $15M for a house which was on the market for a long time at $25M. This isn’t reality for most people…
The only way to really see what is happening is to look at houses which are on the market, have been taken off the market, and look at strata (houses under 1200 ft, under 2000 feet, under 2500 feet, over 3000 feet), and look at by specific neighborhood. Birdrock is nothing like the summit, Upper hermosa isn’t the same as on the beach… Look within strata and you will see some massive changes in both directions!
—
Personal note: We almost closed on a 1.8M house here which would have been 1.2M in Carmel Valley, 600K in the East County, or $325K anywhere in the USA… When we decided that it would be insane to take that level of risk based on what the market is doing – I thought the realtor would was going to have a heart attack… It’s tough out there right now!
p.s. Some houses which were renovated and were trying to be flipped are coming on as rentals, there is a lot of both fear and desperation in this town, but not with the folks overlooking the water in private compounds….
ParticipantHey FSD, et. al. I still think that looking at prices is superficial… It wildly understates the current market. Anyone who buys at these prices (whether 1%, 5%, or 10% under the records) is still buying at the top of a cycle.
Who is buying and who isn’t selling? During the recent craze, any house which could be fixed up went up in price. Didn’t matter if it was near the highway, was on a tiny lot, had a commercial property behind it, etc. Current sales only reflect the houses which ACTUALLY sold. No one is buying a house if it has any flaws, unless it is 20-40% off market. Thus the good houses are selling and the problem properties are not. Public perception is moving to the negative but has not really gotten into the heads of the vast majority. This will excelerate the trend…
Again – don’t look at what prices are, look at inventory, real inventory (the huge number of houses under construction but not on the market) and people moving off the fence to the other side (like myself – sold my house and have been renting for 7 months). The vast majority of the buyers will wait it out.
Another point for exceleration: If you can’t sell your house, you can’t buy a house. Thus the move up, move down market is gone. Beleive it or not, there are still buyers who are buying and then trying to sell their old home. They generally either have the equity to do it, but when their houses will not sell and are empty (I see a lot of them now), they will take a reduced price to move the property.
I’m a numbers guy, but faced with little actual supportable data (the NAR and MLS are data disasters, the gov can’t tell the truth which will panic the market.) I think that we would be better served to look at market dynamics and put numbers on them. For example look at buyer sentiment, look at real inventory and attribute a cost factor and trend factor, interest rates, and time series analysis.
ParticipantHey FSD, et. al. I still think that looking at prices is superficial… It wildly understates the current market. Anyone who buys at these prices (whether 1%, 5%, or 10% under the records) is still buying at the top of a cycle.
Who is buying and who isn’t selling? During the recent craze, any house which could be fixed up went up in price. Didn’t matter if it was near the highway, was on a tiny lot, had a commercial property behind it, etc. Current sales only reflect the houses which ACTUALLY sold. No one is buying a house if it has any flaws, unless it is 20-40% off market. Thus the good houses are selling and the problem properties are not. Public perception is moving to the negative but has not really gotten into the heads of the vast majority. This will excelerate the trend…
Again – don’t look at what prices are, look at inventory, real inventory (the huge number of houses under construction but not on the market) and people moving off the fence to the other side (like myself – sold my house and have been renting for 7 months). The vast majority of the buyers will wait it out.
Another point for exceleration: If you can’t sell your house, you can’t buy a house. Thus the move up, move down market is gone. Beleive it or not, there are still buyers who are buying and then trying to sell their old home. They generally either have the equity to do it, but when their houses will not sell and are empty (I see a lot of them now), they will take a reduced price to move the property.
I’m a numbers guy, but faced with little actual supportable data (the NAR and MLS are data disasters, the gov can’t tell the truth which will panic the market.) I think that we would be better served to look at market dynamics and put numbers on them. For example look at buyer sentiment, look at real inventory and attribute a cost factor and trend factor, interest rates, and time series analysis.
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