Not one to be pessimistic (after all, "optimism" is in the subtitle of my blog), I just have to comment on this article about NAR (the National Association of Realtors). I think their outlook is a bit more than optimistic. For the NAR to say the the market is on the verge of stabilizing, is a desperate attempt to speak it into being. Do they really think that saying it will make everyone believe it? "Oh, the National Association of Realtors raised their predictions for 2008 so we'd better run out and by that house now." I don't think so.
Asking NAR how it feels about the future of real estate is like asking the tobacco companies if smoking causes cancer. Or the pharmaceuticals if their drugs have dangerous side effects. All we get is spin. That's why associations like NAR exist. The leaders of that organization will never admit that agents should be looking for real jobs for a while and that real estate is bound to fall a bit more until things shake out. I don't know why the papers bother to report what NAR has to say. It's almost embarrassing to the professionals who work in the industry. While prices continue to fall and owners continue to run from their homes in droves, NAR is saying that, soon, everything will be fine again.
But, since I'm not one to focus on the negative side of things, I don't want to dwell on this too much. Unlike the naysayers out there, I, too, believe that the market will stabilize and rise again. Not in 2008, though. Probably not 2009 (although, most of the predictions fall on this year). I think it may take longer, only because it's harder for some buyers to obtain financing. So there may be a whole slew of people out there trying to buy some of the inventory, but not being able to because of the state of the lending market. Until new creative financing is developed, we may not see the light of day.
Many people are now scared--shell-shocked, so to speak--because they have either lost their homes or know someone who has. Just as we walked around in a daze after 9/11, this sickening feeling that many are experiencing now will pass. That's not a good thing. I'm sure that many have sworn to now live within their means. To save for a down payment on their next house. To buy something that they can easily afford. To cut up all of their credit cards. The intentions are good and pure. However, as a credit nation, we'll never learn the lessons taught by buying that which we can't afford.
And Realtors fuel this for a big commission check. You inquire with an agent about a $400,000 house and the next thing you know you're looking at those costing $600,000. Do we like the house for $600K better than the one for $400K? Heck, yeah! But why look at something and desire something that you know you can't afford? It's torturous. You just have to have it. And so it goes.
I would be grateful for this time in our nation, if I knew that a lesson will be learned by all. But I know just the opposite. People will waste this valuable experience by allowing history to repeat itself. That's why we can guarantee yet another bubble and another fall in the market. This country is so predictable.