According to today’s Standard & Poor’s/Case-Shiller home price index, US home prices remain unsteady with more declines expected in some areas. Of the 20 areas examined, almost half experienced falling prices, including New York. While this is not good news, it is news and should be interpreted by our profession (and trade organizations) without rose colored glasses. You can read the NY Times article on the report here.
We shouldn’t be surprised. The economy remains very slow, unemployment has probably not peaked, and the flood of foreclosures clogging the inventory will suppress prices for years to come.
Have you ever solved a problem without acknowledging that it exists? I never have, so the NAR should humor us with some all-too-rare candor. Just once, I would like to see the NAR announce something that isn’t Pollyanna about the crisis we are in. Is it a good time to buy? No, it is a great time to buy. Agreed. But it is a down market, and any suggestion that it is getting better anytime soon is not only disingenuous, it is seen as a credibility buster by the public.
So if you are going to buy, buy and hold. You aren’t going sell again in 12 months and make $100,000 unless you hit 1 in a million circumstances. This is not 2005, and anyone who says those times are coming back anytime soon is selling a bridge, not a home. Yes. Buy. By all means, by because you should buy low. But buy for the long term, not the short term. And remember, unlike other investments, you will get utility from your home. You will live in it.