Wednesday, September 5, 2007

It just gets worse

After all of the reading and thinking I have been doing on this real estate market over the past few months, I really believe the strong buyers' market (=crappy sellers' market) will be with us for the next few years, at least 2 years.
Our bigboss manager Barb came by today and was in a meeting with Warren Buffet, the one the ultimately owns Edina Realty. I am proud to say Warren is of the same mind I am - we're going to be in this mud for at least 2 more years.

Today marketwatch.com had another good article. Some excerpts:
The index hit its lowest level since September 2001, and pending sales were 16.1% below their year-earlier level. The July data reflect trends before August's mortgage meltdown.

House prices are down 3.2% in the past year, the biggest decline ever recorded in the 20-year history of the Case-Shiller home price index. See full story. A year ago, home prices were rising at a 7.5% pace nationally. At the Federal Reserve meeting in Jackson Hole, Wyo., Robert Shiller, chief economist at MacroMarkets LLC, said 50% declines in home prices in some regions were entirely possible.

See entire article here:
http://www.marketwatch.com/news/story/july-pending-home-sales-index/story.aspx?guid=%7B0C7A07E0%2DD437%2D4B42%2D8FE2%2D45570D5F1145%7D


I mean, I know that prices are dropping -- I can see that happen --but 50%!?!
Fifty-freakin' percent???

I do know that some areas are really hard hit by foreclosures -- see the Star Tribune's foreclosure map -- and in those areas, real, normal people sellers need to compete with the "everything must go" mentality of banks holding real estate. But will those areas drop 50%?!?!

All I can tell you is if you've got the change in your pocket, and the guts to do some real estate investing, step up to the plate buddy, because you're up to the plate and the pitcher isn't so hot. There are lots of ridiculously well-priced properties to be had, all conditions, all areas. And rental prices are coming up. All of the foreclosed subprime borrowers need to live somewhere, and it's gonna be in a rental.


So, I really think we have about 2 more years of a rocky ride. I know I am busy, and I am going to be hanging in there. But I think we will see a lot of realtors just getting out of the business.