O.K. Why is the "Bottom" So Important?

May 28, 2008

There was a big headline this morning in the San Bernardino Sun newspaper; "When will it hit bottom?" I may have a poor memory, but I cannot remember other years, other declining real estate markets when we were so concerned about the "bottom". Is it because in the 1990s folks purchased homes that were less than they had been, only to find that the value continued to decline? I believe the answer to this last question is "Probably".

There seems to be a consensus of opinion that we are not yet at the bottom. I am not an economist so I do not have their analytic tools. However, I have been in the real estate profession for over thirty years. As those who have been reading this blog are aware, I am tracking the market data to see if the data will indicate if a turn around has occurred. My suspicion is that the day or month that the market turns around will not be clear. The market, if it resembles past markets, will meander for awhile, not going up, but no longer going down. Unlike dropping a stone into a pool of water, there will be no bottom to hit.

Perhaps a more appropriate question is: " Are prices at a level where buyers will want to once again own a home?" Fear needs to be overcome by desire.