Is the Real Estate Ready to Recover?

Published by peter | Filed under Market Trends

A question I get all the time from friends, family, and even people standing in line at the local grocery store is, “Has the real estate market finally hit rock bottom?”

Personally, I think the answer is a little more complicated than a simple yes or no.

Certainly there has been a little bit of positive news lately in the media and certainly we have started to see more movement in the hardest hit areas.   

At the same time, the MLS shows an increase in the number of listings pending in our zip code.  While this is certainly a good sign and indicates that things are starting to turn, unfortunately, nearly all those pending listings are waiting for 3rd party approval.  What that means is these pending listings are all in short sale and there is no way to guarantee the banks will actually accept the offer.

In fact, we have even seen some bidding wars on these short sales that are reminiscent of the boom days where the final offers are actually above asking price.  Again, these are short sales, and while the offers may be above the owner’s asking price it is still below (or “short”) of what the owner owes on the house and there is no way to tell if the banks will accept the offer other than wait for a response.  Unfortunately, waiting for a response from the banks can often seem like an act of futility as it may take several months just to get the bank to respond.

So, as you can see, the answer to whether or not the real estate market has hit rock bottom is not that clear.  What I usually tell people is that while it may not have hit rock bottom, it is certainly pretty darn close.  Therefore, if you are a cash buyer and/or have good credit, now is definitely the time to buy because the prices (and interest rates) are phenomenal.

At this point people who have good credit (or cash buyers) should stop worrying about the bottom and start worrying more about whether or not they are willing to lose the house they truly want in hopes that the market will drop a little more.