Maybe, maybe not.
If I can get 5% per year appreciation on a house, I can become very wealthy. Why? The reason is that I can borrow 80% of the house price, and that is being very conservative.
If I put down 20% the return on my money (as opposed to the bank's money) is 25%. Now I have to be able to pay the mortgage until I can sell the house, but unlike other investments the loan can not be called if the value of the house drops.
The sure clue that the market is turning around and heading up is when real estate agents start buying houses for their own portfolios. We are seeing a little of that now. I have to see it continue for another 6 months before I put any more money in, but I haven't sold anything in the past 3 years either.
The sure clue that the market is turning around and heading up is when real estate agents start buying houses for their own portfolios.
Yes, they are financial whiz kids, intellectual paragons beyond comparison. They only wear those gold polyester jackets as an ironic affectation.
Well, there are some great indicators that housing has bottomed. Inventories reduce to the mean. Home prices conform to proper ratios to rents or incomes. Foreclosure rates stabilize and come down.
Just like there are indicators a boom is about to happen. Watch inventory. When inventory starts to drop to say 4 months for example, you are the cusp of another boom. It shows that demand for housing outpaces existing supply as houses are gobbled up faster than current sales + new homes.
The indicators are there, but people choose to ignore them and just say, “Best time to buy. EVER! every time we see a month to month increase in sales, even when NOT seasonally adjusted. Just mind boggling behavior.