When was this: Every week you'd hear about a bank failing. Real estate crashed. Wall Street crashed. We had a doozy of a recession follow.
History repeats itself.
The last time we had a three-headed economic monster of a recession, housing collapse, and financial crisis was the late 80s. The parallels with our current problems are uncanny. We have the Sub Prime Meltdown and Fannie Mae/Freddie Mac problems; back then it was the Savings and Loan crisis. Are there lesson we can learn from that period that apply to now? I believe there are, mainly because the pattern of the aftermath is also eerily similar.
In Westchester and Rockland County, the price of homes decreased every year from 1987 until 1991. That was followed by another 5 years of flat performance, until, by about 1995, values had returned to roughly 1986 levels. We are experiencing the same pattern by and large, and I believe the slide to be about over. I think we are now entering a flat period, which means we are past the worst, and the bottom point is in the rear view mirror.
In 2010, both transaction totals and the median price of single family homes both rose from 2009 in Westchester County. The median rising should not be construed that your house rose in value. It simply reflected more activity in $ million homes, which was paltry in 2009. And as we know, just because more $1 million homes sold doesn't mean a $500,000 home is now worth more. However, the buyer activity thus far since the holidays ended is better now than any year since 2007 according to my observations. Moreover, buyers' skepticism about competing offers on homes is now at their own peril. Buyers should be aware that for the first time in a long time that they are not alone on competitively priced homes.
What does this mean to people selling their home? Price it right and you'll be in better shape now than any time in recent memory. It isn't a gravy train; it is stability.
For buyers, this means that if the home you like is an aggressively priced place in great shape, you may not be the only interested party. You probably won't be able to bend the seller backwards like 18 months ago, but reasonable offers will get you a home. And you may lose if you don't act on the really mint properties.
Overall, consumers have had cabin fever for the past 3-4 years and there are too many people who want to have babies, backyards and barbecues for the malaise to last forever. We are nowhere near a hot market, but the tidal change is coming, and the door to progress has opened for the first time in a long, long time.