So, the nation has a glut of residential real estate inventory. So, credit underwriting regulations have tightened, making it hard for those with blemished credit histories from getting loans. So, inflation continues to rise higher, unrepentant.
So, the Wall Street Journal asks “How Much Worse Will It Get?”.
This week’s issue of The Economist joins the rising chorus of those asking, how long and how low? “Despite almost two years of plunging construction, the collapse of the property bubble is far from finished” and its impact on broader consumer behavior has barely begun, according to this article. The story points out that the seven other housing recessions since 1960 have lasted an average of 32 months.
We’re two years in, they’re saying?
Real estate, like politics, is local, I guess.
All but a few Massachusetts residents appear to be making their way unscathed through the national real estate slowdown. (Apologies for my bad grammar on that one …)
Would I love to see sellers smarten up and lower their prices to encourage more buyers into the market?
I guess. A drop of 25% in sales (my estimate) hurts most real estate agents where they feel it most (their wallets).
But, I don’t think lower prices necessarily generate more sales, at least not immediately. Too many other things have to happen, over time, to get buyers into the market.
I think there is a general “wait-and-see” attitude on the part of most buyers. Certainly, I don’t think prices are going up between now and next summer, even here in “red-hot” Boston.
I am in the minority, I think, who believe the Fed won’t lower interest rates any more. (Plus, mortgage loan rates are not directly influenced by the Fed Funds rate, anyway.)
All I want is stability. Six months of no news, one way or another. Stable interest rates, steady sales volume and prices, etc., etc., etc.
That will improve buyer confidence.
But, like I was saying at the beginning of this post, if the market stayed the way it is, today, well, that I can handle!
More: How Much Worse Will It Get? – The Wall Street Journal real estate blog
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