List Only

What happens after the housing slump is over?

Apparently, we've entered a difficult time for home owners, both with existing / new homes not selling for those who want to move and with loan issues causing foreclosures to rise. I'm sure this isn't the first time this has happened. The question is - during previous occurrences of this type, what has happened historically? What's the timeframe and the order of events that we can expect once the recovery begins (housing inventory starts to reduce, foreclosure rates decrease)? Please be specific and provide references. Thank you.

Public Comments

1. good question! i want to know the answers too
2. According to the National Association of Realtors (NAR) economist, the current "slump" is expected to continue into about the middle of 2008. It seems that we're in a natural correction after almost 5 years of ridiculous property appreciation ... and a lot of frenzy where people bought properties even though they shouldn't have. Unfortunately, some lenders took advantage of people and put them into loans that were NOT good products ... and those people are now losing their homes. The good lenders are still doing loans to the buyers who haven't been scared to death by the news media and the Wall Street pundits. We will survive this ... and once we do, then the buyers will come back into the market, homes will be selling again and property values will appreciate.
3. I have been a full time real estate broker in North Texas since 1978. In about 1986 our real estate market entered a horrible time. Interest rates were high, our oil industry was laying off people left and right, our banks and savings & loans were actually going broke. The houses they foreclosed on were taken over by the government. The federal government formed an organzation called the "Resolution Trust Corporation". The compliants I hear from other parts of the country don't sound anything like what I saw then. We still have not fully recovered. But in 1989 I remember people panicing and selling their condos and houses at givaway prices even if they were happy in their homes because they were afraid prices would go down even further. In 1991 some of those same condos and and houses had gone back up by 50% in price. The people that bought when everyone else was in a panic made a huge profit. I would recommend that you buy properties IF they can produce a positive income stream. Buy high quality property wether for investment or your personal home. Don't sell in a panic situation. Since then we have had small increases in price on a yearly basis. In the local paper today they say that the North Texas average sale price for September was 3% higher than last year. We are not doing great but we are still having price growth.