Would you know when home values hit bottom?
If you’re on the sidelines waiting to buy a home until you’re sure the housing market has bottomed out, good luck with that.
The only way to absolutely know the market has hit bottom is to wait until home values rise and look back.
By then, you will have missed it.
I have to admit, I judge the market partially on how busy my friend Sue the Realtor is.
Lately, Sue’s been getting migraines stressing out over how to get a lot of new deals to the settlement table despite low appraisals and impossible mortgage underwriting guidelines.
That’s a big change from last winter when there were frightening few deals being made.
If you don’t have a Sue, you can look at snippets of optimistic real estate news that came out over the past week:
- Home and condo sales are on the rise in South Florida, which has been one of the worst real estate markets in the country, according to the Palm Beach Post.
- Investors are scooping up a lot of those properties because they know a good deal when they see it, USA Today reports.
- The overhang of foreclosed real estate that banks still have to sell is shrinking, according to data giant CoreLogic.
- New strategic defaults are down, according to DSnews.com, meaning fewer people who owe the mortgage bank more than their house is worth are walking away even though they could afford to stay.
- Pending home sale contracts rose 8% in May and were up in every region of the country, The Wall Street Journal reports.
I’m an optimist, so to me, those stories show a housing market bouncing along the bottom -- good news if you own a house and hope to see the value rise enough to eventually cover the cost of a really nice rest home.
If you’re a pessimist, you can look at all those cheerful real estate stories differently.
You could say that Miami homes are being snapped up by cash investors from Brazil, as Bloomberg.com reports, because real estate prices in Brazil are up 25%, its currency is up 45% on the U.S. dollar and property in Miami costs about half as much as it did in 2006.
And the overhang is dropping because someone finally made the banks slow down long enough to read their own foreclosure paperwork.
And pending sales look good only because they were so bad the month before.
So are you an optimist or a pessimist?
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