Beats me. Another week is passing without any significant market activity (26 Circle Drive, discussed here a couple of times, was reported as “pending” today but that’s old news and asking price was just $2.1 million). We have essentially no data to use to guide clients on what the current market price for a given property is, or should be. I’m using 2000 prices as agood starting point for buyers, but is that the bottom? I have no idea.
I had been advising readers that if they didn’t have to sell now, they shouldn’t, but in effect, that’s promising that we’ll see a rebound and I have no reasonable expectation that will happen any time soon. If it doesn’t, and prices keep dropping, then holding on to property now may look like a horrible idea nine months from now.
I suppose this all just struck me while reading the post below on what’s happened to financial stocks. They dropped 50% last year and another 40% this year. They could come back – stranger things have happened – or they could get nationalized and wiped out. You tell me which. But I’d have advised (thank God,no one asked me) a bank stock owner to hold on last December rather than realize his losses. Oops.
My brother Gideon, who is more of an optimist than I, thinks, or hopes, that warm weather will bring out buyers who will start buying. When sellers see what the new market value is they will, according to this sunny scenario, gulp hard and whack the bejesus out of their prices, thereby rejuvenating the market, albeit at a much lower “reset” price. I, on the other hand, have a deep, abiding awe at the power of the human being to deny reality no matter how hard it smacks him in the face. In this Eeyore scenario, sellers won’t budge, buyers won’t budge, and we’ll all sit around in a thickening morass of unsold houses that slowly lose their value.
I do hope Gideon’s plan wins out.