Five Reasons Housing Market Headed Down Further

Article Submitted by: Thomas Bivens
Real Estate


There's no way we have hit bottom with the housing market. If you have real estate to sell, you'e in trouble. If you want to buy - wait! Here are five reasons why.

 

Submitted: Jul 18, 2007    Views: 428    Comments: 3    Likes: 11   


A few years ago all of the economists said that the national housing market would never drop.  Last year was the first time in 40 years that it did.  And it's going to go down further, especially in markets which are overbuilt, over speculated, or overpriced - California, Nevada, Florida, etc.

There are several reasons why the drop will continue.  They include:

  • Sub-prime lending woes which will tighten credit across all markets.
  • Resets on adjustable rate mortgages (ARMS) will reach a peak in 2007-8 resulting in more foreclosures.  This will increase inventory on the market and depress prices.
  • Demographics.  Aging baby boomers are increasingly selling their suburban homes and moving into apartments or smaller condos.
  • Specter of rising interest rates.  Interest rates will most likely rise as inflation continues to increase.
  • Mentality.  The mentality of "housing always goes up" has been broken as it was in 2000-2001 with a rising stock market.  Once a bubble like this bursts, it works in reverse as buyers delay purchases in the anticipation that prices will come down.  This becomes a self-sustaining prophecy.

Even David Seiders, the chief economist for the National Association of Home Builders seems pretty gloomy:

http://www.marketwatch.com/tvradio/player.asp?guid={B96D16C8-2F6D-4503-ADD4-C8824371BB0A}




Related Articles:



11

Email this story Email to someone | Print Story Print Content | Add to reading list

Comments Received:

JRubinstein
JRubinstein

Your third point - demographics - is actually what could save housing from a big drop in big cities, including NY, SF, Philly, and maybe Chicago.

Posted: Jul 18, 2007

Thomas Bivens

In the cities perhaps it will blunt the impact. But the suburbs will be devestated.

Posted: Jul 18, 2007

jeff simione
(Unregistered)

your all crazy the houseing market is created by and run by the realest agencys

Posted: Aug 16, 2007



Add Your Comments:

Your Name:

Spam protection control:


© Copyright 2008 Thomas Bivens All rights reserved. Thomas Bivens has granted BestCashCow.com, LLC non-exclusive rights to display this work on Bestcashcow.com.

Financial products of all nature bear inherent risks and this website is not a financial advisory service; it is a forum for users to share and to compare notes and observations on financial publications. The website provides, free of charge, the technical and logistical apparatus and the medium for users to share and to publish financial information and to comment on publications. As such, the website’s operator can not and does not take responsibility for information, observations or opinions of any sort or nature provided by third parties with whom it is not affiliated who use the website to publish, to comment or as a means of solicitation. Users are specifically warned against following any advice related to specific instruments, including, but not limited to, equity securities, that may be provided by other users directly on this site or on web pages to which other users have provided links on this site. BestCashCow.com can not and does not check or verify the qualifications and credentials of users who publish or comment on this site or on linked pages. Users should seek personalized advice from qualified professionals regarding all personal financial issues and evaluate the risks and applicability to their own circumstances of each financial product discussed regardless of who the publisher is or purports to be. Should you, through your use of this site, identify an individual or organization purporting to offer personalized advice, you bear all responsibility to ensure that the individual or organization has the qualifications that they may represent on the website, and that their advice is appropriate for your circumstances. On certain webpages, BestCashCow.com provides information related to rates on US-based savings accounts, CDs, short-term government bonds, and other US cash equivalent securities, also free of charge to internet users for their independent use. The accuracy of this information is not guaranteed, and the information, like all other information on this website, should not be construed to provide investment advice, nor to endorse a financial product of any sort.

© 2007 BestCashCow.com, LLC. All Rights Reserved. Terms under which this service is provided to you. Privacy Policy.