If you have read the news lately, you've surely heard about the rebound in the housing market. The question is, of course, whether this is an accurate assessment.
The Wrong Housing Rebound
2006 was a shocker for many new homeowners. The market flattened. In the second half of the year, it actually began to tank. Home values began to drop like a rock in some parts of the country. Finally, it looked like the famous real estate bubble burst. The questionOf course, was how long the situation would last? With home values have withdrawal and higher interest rates, the immediate future is not particularly good.
The year 2007 stands up and running, we now hear that real estate is on the rebound. Imagine! After only six to eight months down the time the property market is back up and running. Or is it?
Make no mistake, the number of home sales pick up pace. Many gurus and experts, but are drawing the wrong conclusionsfrom this fact. In their eyes, this means there are good days again. Not so fast, my friends.
While the number of sales have picked up in the housing market, the question is, why? Upon closer inspection, a certain character that is actually not a positive sign. The number of sales is rising because more homeowners are away from reality. In particular, they recognize the value of their house has fallen and there are prices accordingly. While at the sales are picking up, home valuesdecrease further.
So, who cares really as long as sales are picking up? Well, care should homeowners. The values in a local real estate market will probably be sold by the last few homes. In the current situation is, these homes are sold for less than they did a few months. While this makes the market are represented, but not to increase home values in the area. Instead, it actually pushes a little down. In the best case, he flattens it out to every transactionPrice applies to the property in question.
So, we see a recovery in the housing market? Yes and no. We will see more sales, but no positive changes in the value of real estate. In short, we have a false housing rebound.