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Over the last couple of days we've heard a lot of really spectacularly bad pronouncements about the housing market by builders, CEOs of mortgage companies and economists. While it can seem overwhelming to hear people now talking about a housing recovering that doesn't occur until 2010, there is a silver lining here!
First of all, it's like an addiction, you can't get better until you admit there'a problem. As long as we had so many "experts" saying "we've hit bottom" or "the housing recovery is just around the corner" there wasn't much chance that any of the real policy makers were going to move to change anything. Everyone from Congress to the Fed are now going to be looking at the effects of a long-term housing downturn on the economy. They're not going to like what they see and that may motivate them to try and help the situation.
The second silver lining here is that first time buyers who were sitting on the fence thinking they would wait until they were sure the market had hit bottom, may stop waiting. It's one thing to say we can squeeze the three kids into the two bedroom apartment for another month or two. It's another thing to think they'll wait out the downturn for several years. This may move some of those buyers into the market sooner rather than later.
And, finally, some sellers are going to get it that the price of their home has to drop. No more thinking that if they hold on for just another month or two the market, and prices, will rebound. It will likely be years before prices rebound. If you want to sell, get aggressive about pricing or forget it.
I've sounded too pessimistic for some people over the last year. But when everyone in the whole world gets pessimistic that's when we'll start to see some light at the end of the tunnel!
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