Depsite the recent poistive news, this post originally published in May still is relevant.
It’s the question on the mind of every buyer, seller, broker, and banker.
The February 2009 Price Update by J.P. Morgan reported that the cumulative price decline of the nation’s housing market was 32 percent below its peak in July 2006. The same report opined that prices will drop another 20 percent by 2010 or 2011. Although some regions of the country are faring better than others, the total correction from peak to trough is expected to be down 45 percent.
While the statisticians and economists may debate the exact timing and size of the correction, I’d like to offer another perspective: “When will we hit bottom” is an irrelevant question.
This is not a callous observation, but a practical one that empowers you to meet the challenges of this moment. And the realities can be boiled down to a few simple observations:
Right now, the only person who comes out a winner in this environment is the buyer. Sellers, agents, and banks all face historic challenges: a huge backlog of inventory, falling prices, mortgage defaults, and on and on. It is a buyer’s market, obviously, and anyone looking to purchase holds all the cards.
So what do you do if you are on the other side of the transaction?
If you don’t have to sell right now, hold onto your property for the next two to three years. By then the market should have hit its bottom and stabilized.
If you have to sell now, here are a few tips:
The luxury real estate market will eventually rebound. Try to follow these common-sense principles until then.