From a reader: Do you think housing will rebound? Or will we see price declines?

By Greg Perry
Kirkland Realtor

Occassionally I will participate in discussion on Seattle Bubble, a local real estate blog that focuses on the local real estate market.  I was asked the following question yesterday.  I thought I would repost my answer here:

By what goes up must come down @ 142: greg can I ask do you think housing will rebound or will we still see price declines in the next six months? 

Here is an article that I wrote in early 2007 that sums up most of my market philosophy.

 http://workingforyou.typepad.com/feature_article_pricing_t/ 

I work very different than most agents in that before taking buyers out to look at properties, I ask them to come in for a meeting that lasts for 1 - 1 1/2 hours, depending on the amount of questions the buyer has. I use a power point presentation that keeps me on track. For 14 years my “market slide” has shown the following: 

 

1. What is a Buyer’s market? 

2. What is a Seller’s market? 

3. What about appreciation. Will your home appreciate on a daily basis? 

4. What are our seasonal trends? 

5. What’s happening in today’s market. 

This slide kept ME grounded as much as anything could in the huge run up from 2002, as it forced ME to have a frank discussion with EVERY SINGLE BUYER about market appreciation. I have always believed “what goes up must come down”. So, 10% plus appreciation rates were a temporary bonus for some, I never felt this would sustain. My words to every buyer for over 14 years is “all markets correct”, and I believe this.

 Next 6 months? It depends on the neighborhood, price range……and absorption rate. I suspect the high end will continued to be troubled. Whether we believe in government stimulus….. or not….. the gov will do everything it can to throw incentive  at housing to get it going. Watch for more stimulus. In the lower price ranges, I think prices may stabilize in the best neighborhoods. Outlying areas may continue to struggle. 

I really do not like measuring markets MOM  (month over month) by median price, especially with segments of the market, like the high end, eroding overall pricing. When I work with a buyer, or a seller, I do my best to figure out what is happening in their specific market. 

 By the way, I also believe what goes down, will come up.