WABROKER

The value of a thing,  (this is especially true of house values) is determined on any given day by the amount that a cash buyer is willing to pay for the thing on that same day.

When the number of things for sale exceeds the number of buyers there is usually a corresponding drop in price to attract the limited number of buyers to the limited number of properties where the sellers are motivated to sell and not merely hoping to sell.

Because the market is  over loaded with inventory ( properties for sale) and the number of buyers is decreasing this can only put downward pressure on prices.

Since all the bailout plans so far have failed to stem the tide of foreclosures this inventory is  still increasing each day.

In spite of all the bailout plans the total number of buyers is decreasing each day as more and more potential homeowners lose jobs or pay to the recession that  we are experiencing.

So if you are in a position where you have to sell, I suggest that the safest course of action is to do it now before you see a further drop in house values.

If you are thinking of buying, then  think twice, hold your breath, and wait for the next slump in prices and you may very well be will be glad that you did.

1. The rhetoric used by the many government sources  is often  meant to give hope where this is no supporting evidence to support it.

2. The prediction abilities of the analysts is historically as accurate as a toss of the dice.

3.In large systems (such as our real estate market) at some point physics take over. There is no increasing demand for an ever increasing inventory.

Physics tells us that the activity will drop as fewer home buyers compete for more and more homes.

So then prices will likely have to drop as well.

In order to entice buyers back into the market home prices must come down.  There is little else that can be done.

Further buyers are becoming more skeptical and less motivated in general after all the false promises and inhuman treatment at the hands of the banks and our elected officials.

This cools the engine of activity,  slows it down even more, and threatens to make it grind to a halt.

Unless completely new systems of “buy and sell” are created and implemented there is only one logical outcome,  that is activity decreaes  and prices must then come down.

When the bubble first burst lenders had lots of foreclosed properties that they tried to sell at the old inflated prices. Few people decided to buy  and the activity slowed almost to nothing.

When prices dropped  then the activity increased again but only for awhile.

All the hope, help, and bail outs, since then have only served to anger and frustrate most people but have not stimulated any activity that is  sustainable in nature.

That last concept  is the key, ” sustainable”

Without new economic growth, without new sustainable businesses, without new jobs that pay a  livable income, any new blip up in activity will be temporary.

House values must fall again unless the recovery we have all been praying for shows up in the next few months.  Good luck with that.

There are solutions.

They are all “outside of the box”,  “innovative”, and “creative” .

They all involve ordinary citizens taking back control of their lives.

Want to learn more about a real estate topic.

Call 916.454.5400 to talk t the broker