Wednesday, July 18, 2012

Mid-2012: Would Your Decision to Buy or Sell Real Estate Change If You Believe Prices May Not Recover In Your Lifetime? - Video

If housing's not going to recover any time soon, and is likely to keep struggling, is now a good time to sell?  And if interest rates keep hitting new historic lows, is now a good time to buy?

The latest mid-year Charlottesville data indicates that home sales are up in 2012 over 2011: see Nest Realty and the CAAR report.  While that's progress, consider the historic numbers for context2011 sales were at a decade low, and 15% lower than 2010's.

Home prices are still declining in many segments of the local market, but sales figures in some segments are starting to stabilize.

Nationally, despite cheerleading stories like this one (which presumes not only that the reader is a simpleton but that s/he is not going to make it to paragraph 12) the market is bleaker.  Not everybody lives in a company town like we do.

That home prices may never recover is the concern of Yale economist Robert Shiller, also of the eponymous Case-Shiller Price Index.  Though it tracks just 20 major metros, the index influences buy/sell decisions all over the USA. When asked to compare the current housing crisis to a baseball game and pick the inning, Shiller stated "Maybe we're in the fourth."

So what about C'ville?  Where are we?  Apropos the bigger picture, Shiller says, "A lot of people have the mistaken impression that we must be at a bottom."  But if C'ville is now in its own little bubble--in a good way--we may have the New New Normal: we may be insulated by the big employer(s), the major acceleration in price declines may be behind us, and we may be seeing a low but stable volume of sales.  So what should a buyer or seller do?

Watch the video as Robert Shiller discusses housing with USAWatchdog's Greg Hunter.

1 comment:

Anonymous said...

Long-time housing pessimist here. Just closed on a house in cville after a couple of smug years on the sidelines. Price seemed reasonable, and rates are indeed crazy low.
Importantly, I bought the house I want to live in for the next 50 years. No idea whether it will ever be "worth" more than it is right now, but I don't think I made a terrible decision. We'll see!