Another 15% Drop?
There are a number of reasons why we should all skip the newspaper, tv and radio news media, and an Idaho Statesman article today has given us one more. The article, titled “Home prices must fall, state economist says,” tells us that home prices need to drop another 15% before the market can start to recover, according to economist Kelly Matthews.
Now, nobody actually knows what the market is going to do, so why does the news media publish a different educated guess everyday? As if it isn’t already tough enough to get your home sold, it is quite possible that it won’t even get shown until you drop the price 15%. Why? Because the “experts” say that the homes in this valley are overpriced by that amount. I agree that many of them are overpriced, but there are great homes out there at good prices.
A home is not a stock that can be day-traded. Real estate was never meant to be “flipped” or held short-term. In fact, before the 2005 and 2006 boom, it was generally understood that you had to live in your home for at least four years before you could break even. So, why are homes analyzed as such? Why can’t we just let people find a nice home in a nice area and let them decide what it is worth?
Photo Credit: dview.us via flickr
Good breakdown of your market. I always find these number fascinating, not to mention very important. It’s critical for today’s real estate professional to be market-savvy, and I think knowing such things is very helpful. Can you think of other ways to stay productive and knowledgeable?