Friday, July 25, 2008

Still Waiting For The Bottom In Housing Prices

Price Reduced signEvery time we hear bad news about the housing market someone out there says this is now the bottom, and that housing prices are only going to get better from here. At least so far, those predictions have proven to be poor. This week there have been several new reports issued detailing the turmoil the housing market is in, and it does not look pretty.

CNN Money even created a special report section called the “Mortgage Meltdown.” In this section they highlight the various gloomy reports that have recently come out. These include: “Foreclosure Filings up 120%,” “2.2 million vacant homes for sale” and “Home sales at 10 year low.” Those headlines pretty much sum things up; foreclosures are mounting, there are a ton of homes on the market and no one is buying them.

Ultimately homeowners and investors alike shouldn’t concern themselves with trying to time the market bottom. Trying to time such things is an inexact science, and if you are banking on timing the market in order to secure the quality of your investment, then chances are you shouldn’t be making the investment.

It appears that the government is going to pass the huge housing bill soon, and many politicians, at least, believe that it will be just what the doctor ordered for the housing market--that it will right all the problems. I’m not sure if they are completely oblivious to the problems, or if they are just putting on a show to appease their constituents, but it will hardly fix the problems of the housing market. That being said, there are going to be a lot of people calling the market bottom now--the news is bad and there is favorable legislation on its way. Don’t fall for these soothsayers' words, though; they are merely guessing, nothing more and nothing less. Anyone who says they know for sure is lying. If you are looking for a home to live in, you have to live somewhere right? If you are looking for an investment home, that’s okay too, but just don’t plan on appreciation, make sure the numbers work regardless of which direction the market goes. Don’t get caught up in market predictions: Use your own brain and do what is best for you and your family.

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