In this period of falling home prices and abundant inventory, both buyers and sellers need to adjust their expectations. Neither are happy right now.
Sellers need to be more realistic about the true value of their property. Unless it is priced on the money, it will probably take longer to sell, and with perhaps some more concessions along the way. Bridge loans and purchasing the next property before selling their current home are risky strategies.
More than likely sellers need to forget about “what they could have got for it” two years ago.
Qualified buyers seem to lack urgency, expecting that they will obtain a better deal if they simply wait. Being patient while looking for a great opportunity, and then being ready to move quickly when they do find it is a workable strategy, if they are going to stay in the home for an expected 5 years or so. Even if prices pull back, purchasing at a discount allows for further softening in prices.
It is hard to know when the exact “bottom” is in, and typically trends last longer than a year or two. It is my belief that we are still in the early stage of this correction, and probably will need more time and price erosion before the housing market rebounds.
If you have trouble staying awake at night, you may not want to read what Jon Markman discusses with Satyajit Das.
Purchasing a home right now makes sense only if you need a roof over your head, can afford the payments, and are going to be there awhile.