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Prices May Be Down, But Housing Market is Not Out

Wed Feb 29, 2012 on Blog

Just like Baby Bear's Porridge, the Housing Market isn't too Hot or too Cold

Some analysts are once again crying gloom and doom about yesterday’s latest release from the Case-Shiller Index.

Case-Shiller, one of the most respected indicators of housing prices nationwide, posted new lows in December in 3 key composites, including a 3.8% drop in the national composite.

The index’s own chairman sounded dismayed when announcing the numbers.

“In terms of prices, the housing market ended 2011 on a very disappointing note,” David Blitzer, said.

It’s true we’ve seen a steady decline in housing prices over the last few years, but the housing market is not in the midst of an end times or doomsday scenario.

From my vantage point, the state of the housing market is just like Baby Bear’s porridge.  Not too hot and not too cold.

Yeah housing prices are as low as the lowest hanging fruit right now, but it doesn’t mean that all is lost.  Prices are just one side of the story.

Housing sales have risen consistently over the last few months just as prices have dropped.

There is less inventory on the market. Buyers are slowly returning to the table. Prices are dropping, and likely will continue to drop, but I believe you actually have a foundation for a stable housing market staring back at you.

It is what it is, and it ain’t bad.

If there is a positive to the banks looking to dump their backlog of foreclosed homes back on the market, its that for the first time in a while, scores of investors and first time buyers are there to pounce.

So if you’re a seller, of course you’re not going to get the price you wanted. But you CAN sell. You don’t have to be trapped in an underwater home anymore.

Short sales are a big contributor. You leave the house without a deficiency and maybe even with a cash incentive. If you are a seller you should be thrilled, considering where the market has been the last few years.

If the market offers you a chance to get out and move on, then take it.

If you’re a buyer, there’s no question it’s a great time for to purchase a house, and it will be for a few years.

If you’re forming a family or just getting out of college, you can get into a home and in some cases it will be cheaper to buy then rent.  

You’re going to find affordable houses that you wouldn’t have been in your price range during the housing bubble.

Now banks and realtors may not like small loans or small deals, so they’ll continue to tell you the sky is falling but the truth is far less interesting.

The housing market is a long way from healthy, but it’s on its way.