lasvegasreo.net Blog

Housing booms are short and exciting but housing busts are long and painful. The worst is not over, prices are likely to fall further in many market in the following 5 years. Cities like Dallas and Houston that the boom bypassed will look good by comparison. Seattle and Raleign with job growth shall also do O.K. Cities like Detroit that are suffering economic contractions are the biggest losers. Cities like Los Angeles, San Diego, and Bay Area where prices are extremely high have begun to adjust. Cities like Miami, Las Vegas, and Phoenix which have a huge stock of unsold houses or condos are currently frozen. Many sellers are still asking for too much. It is tough for them to understand that real estate investment can lose big money just like the stock market. Advices to homeowners: If you need to sell, cut the price by an extreme amount to get buyer’s interest. Otherwise, it probably means you will work yourself into some kind of corner in six months. Advices to home buyers: It is not the ideal time to buy or move up, even with the recent price declines. The inventory of existing homes are still increasing substantially. That backlog will take a long time, and a lot of price-cutting, to clear out. I will guess that prices nationally could fall 10% to 20 % from the end of 2007 to the end of 2008. The Federal Reserve is likely to help the market by cutting interest rates but banks are being required to toughen their standards for loans. We are looking at several years of weak home prices and no one is talking about real estate any more.