Finding the Bottom of the Real Estate Market

Down, down and down we go. Where will the real estate market settle? Is it possible to figure out where the bottom of the real estate market will be? It is an interesting question.

The news is in for the recent financial quarter. Unfortunately, it reads pretty much the same way as the last four quarters. In general, home values are dropping. Basically, the real estate market is balancing out after the massive run up earlier this decade. Whereas Las Vegas led the way with 25 percent appreciation rates then, it is now leading the pull back with 25 percent value reductions. Ah, the Ying and Yang of the real estate market.

Many potential buyers and sellers are now wondering if the bottom of the real estate market is going to be found soon. If there was a definitive answer, a lot of us would be very rich. Unfortunately, there is not. A few tidbits of information, however, are painting a complex picture.

Is there any good news in real estate? Yes, there is. For the first time in a while, sales figures for homes actually went up in the last quarter. Although sales prices were lower than the same time last year, the increase in sales is a sign that buyers who have been sitting on the sidelines are starting to get itchy trigger fingers. When this group moves in mass into the market, the bottom will have been reached.

There is a potential contradictory action about to happen, however. The Federal Reserve is going to start raising borrowing rates. When this occurs, the bond market will react and mortgage interest rates will start increasing. The good news is this will make the dollar a better investment and oil/fuel prices should come down. The bad news is many potential homeowners may have problems getting financing for real estate purchases. Still, the increased rates should not serve as a bullet to a bottoming out market.

Is the real estate market at its bottom or does it have more room to fall? There is no clear answer, but indicators suggest we may be beginning to see a plateau. The next two financial quarters will tell us more.

Finding the Bottom of the Real Estate Market