Both buyers and sellers are stuck on moving forward. Can the Seller get a better price if they wait to sell?  How long should they wait? When will the market start to improve? Can the Buyer make a better deal if they wait? How long should they wait? When will the market hit the bottom?

Great questions! Who has the answer? All we can do is look at history, and use that evidence to predict where the market will go from here. I changed my own predictions this year. In 2009, I predicted that we would see a bottom out of inventory and interest rates within two years, and then we would begin to see some positive appreciation in 5 years. I have changed my mind! Doug Mendenhall, Alpine Mortgage and Spark presented a comparison of the Great Depression and Now.  It made sense to me…but it only one point of view. Here are the high lights:

In the Great Depression (why do they call it “great”?), looking at statistics from 1929 to 1941, the real estate market saw a decrease in value from 2.37% to 26.66% in 1933, and then a slow recovery from 1934 to 1946. By 1946, the market was seeing close to 7% appreciation again. It took 12 years.

By comparison, beginning at 2007 and projecting to 2019, we see that market values have decreased each year,from nearly 11% to 23% drop in value, and the projection is that they continue to decrease through 2011. By 2012, values will begin to improve, and interest rates will begin to rise. Using this comparative projection model, we should see appreciation of 7% by 2019.

If you agree with this point of view, and I do agree with it, you will see that Buying real estate right now is not a bad decision. If you plan to hold the property for 8 years, you should see a gain on your investment. However, if you are someone who wants the absolutely rock bottom of the market, then buying real estate in May of 2011 should give you the lowest price plus the low interest we are seeing today.

If you need to sell your real estate, then you just need to sell. Price it right, follow your Realtor’s advice and get it sold. People are buying and money is available for buyers who have both income and excellent credit. If you don’t need to sell right now, then by waiting til 2012, you will begin to see less loss on your real estate investment. Keep in mind that if you have to sell low, you can make up your loss when you also buy low. And that time is now.

This is all about point of view. None of us have a crystal ball about where the market is going, but we can use this kind of data to support a hopeful opinion about our economy and the real estate market. Let me know if you find this information helpful!!