How to tell when the real estate market bottoms. Use local rents and unemployment to tell where the bottom is going to be. Use these same indicators to tell when the market has bottomed.
One thing to always think about when you have a vacant house is the loss of income while it is vacant. Even if the house is free and clear, you are missing the income you could have had.
During down times in the housing market here in America, people rent their house while waiting for the market to turn. Most of the time that strategy works, as the decline is short and house prices advance quickly shortly thereafter. This time is different, as the decline in prices is due to an investment bubble based on easily available loans. That bubble has burst, and house prices are falling because of the lack of loans at low interest rates. House prices are falling, but they have been falling slower than the fall in available loans, which are virtually non-existent for people with medium credit.
The reason is simple. Yesterday, it was announced that 13% of prime loans (the best creditworthy people) had defaulted.
Eventually, this will become common knowledge, and home prices will reflect this fact by declining rapidly. If there are fewer qualified buyers, even if the housing supply remains the same, prices will fall to get the qualified buyers bid.
So the strategy of taking the house off the market will have the opposite effect than it did in the past. Prices will fall much more sharply when the negative news about the market becomes commonplace. Then there will be a rush by the home owners to place the house on the market and sell it before the price declines more. The prospective buyers, seeing the fall in prices, will wait before buying to see where the bottom is. There will be fewer buyers waiting to buy more houses. Supply and demand will dictate that the price will go lower, faster. In America the peak in subprime loan defaults is scheduled for August 2009. But we have yet to see the collapse of the real estate mortgage market for the prime and alt A market yet, which will continue for several years yet.
When the dust settles, house prices two years out are likely to be 1/3 to 1/2 lower than they are presently.
This is an optimistic scenario when compared with how bad things could get. There is a movement afoot to deny Obama the presidency, due to the fact that he may not be a native born citizen. If this happens, there is certain to be rioting in the streets. Martial law will be declared. If this attempt fails and the issue is not resolved, and Obama becomes President, the people behind this will do their best to make the country ungovernable.
Check out this link; http://www.obamacrimes.com/attachments/072_ObamaPressRelease12082008.pdf
In either case, this turmoil will drive down house prices here in America and abroad.
The most likely outcome is that Obama does not qualify to be a native born citizen, and may not be a citizen at all. Obama has stated he was born in a hospital in Hawaii, but he has not produced a birth certificate signed by the attending physician, and giving the name of the hospital where he was born.
As this is easy to do, the question remains why he has not produced it to date.
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