The Real Estate Market Crash: When and how will it End?

While many people are focused on the Dow Jones Industrial Average, wondering if their 401K will climb back up, perhaps an equal number are pondering the question of when their home values will regain what they have lost. In previous entry I blogged about the real estate crisis we are currently in and who is to blame for our situation. This week I chose to continue in looking at the blogosphere to find out what opinions commentators are offering on when and how the real estate market will return to its previous level. Many opinions differ as to when the housing market will turn around. Most analysts think that we have not yet hit bottom while others seem to think we might be close. One of the keys in solving this puzzle is fixing the problems that put us in the debacle in the first place. Fortunately things are slowing improving and responsible lenders are approving loans to buyers with jobs, good credit and a down payment. Now the public can recognize that home ownership is generally not a good short term investment. Another contributing factor which will help improve the market is if sellers who do not really have to sell would keep their homes off the market. When searching for relevant blogs I chose two in which both bloggers offer solutions to what they feel will help pull the economy out of this slump faster. The first blog I commented on, titled “When Will Real Estate Values Begin to Appreciate Again?” written by a man names Aubrey and his theory is for Americans to reinvest into America like they did in the earlier years. The second blog, “10 Reasons Why California is Years Away from a Housing Bottom: Rebuttal to Those Calling for a Bottom for California Housing” written by a group called Dr. Housing Bubble and they propose ten reasons as to why the real estate market will not the bottom. Each of my comments can be found below for your convenience.

“When Will Real Estate Values Begin to Appreciate Again?”
Comment:
Aubrey, thank you for taking the time to write on an interesting topic that many want answers to yet only time will tell. You bring an interesting opinion to the table when you say Americans need to reinvest back in to America relating it back to the 1930’s and 40’s. However, those newlyweds back then, that so called made the “American dream” was able to make the investment into their home because banks were able to back them up, given their financial situation. Today and at our current time, lenders are becoming more conscious of people and will not give those loans such as a mortgage for a house unless they have a decent job with a well paying income and good credit score. Young people today who become married and want to save enough money for to put a down payment on a home might not have the credit score a lender wants to see. You are right on the other hand; people today have become obsessed with credit and making their money liquid.


What I am trying to get at is yes Americans need to start reinvesting into real estate but many do not have the criteria lenders are looking for and therefore we are asking the ones who are financial sound to help bring back up our economy. On another note you say it will not take Wall Street in doing so to help the housing market out. I disagree, if Wall Street is up people will earn their money lost and will be able to invest in real estate and therefore bring back the old America you talked about. Until then you are correct no one can predict the end to this slump only time can.

“10 Reasons Why California is Years Away from a Housing Bottom: Rebuttal to Those Calling for a Bottom for California Housing”
Comment:
Dr. thanks for the ten reasons as to why California is far from hitting the bottom. You managed to very persuasive arguments to the discussion with great backing facts. I agree with you that our economy as a whole is far from a housing bottom because today prices are slowing increasing and we are beginning to climb back up. Many might think otherwise but we are in no slump. There are many external factors that will not allow for us to hit a housing bottom. Even today such as the new development of L.A. Live this will demand an increase in sales prices for condos, apartments in the downtown area because entertainment is where people want to be. The metro areas are helping out our economy. Even with the real estate prices at 10% less than they were last year, many of the metro areas in the nation are still experiencing price increases. This is largely due to first time home buyers who can still afford to purchase properties and retiring homeowners who are selling their homes and then either moving into a retirement community or purchasing smaller properties. Another important factor is buyers are at a great position to purchase real estate and people do not want to drift away from that. The credit crisis is already is easing. Yes, your credit has to be good to get a good loan from a lender, but loans are available. And the loans are cheaper. As you mention, home prices continue their decline but that will only fuel a turnaround once the market picks back up. Lower prices and lower interest is where it is at now ask yourself what more can a homebuyer want?