Despite CNN Money's best efforts to be the hysterical harbingers of hyperbole in regards to the current real estate market, a silver lining still shines through in this report for anyone savvy enough to do their homework, be patient and bide their time to seal the deal on a good home buying bargain.
But it may pay for buyers to wait. Many housing experts say that the worst-hit metro areas have even farther to fall, and could see total drops of as muchas 50%.
"The housing boom was unprecedented in U.S. history," said Michael Youngblood, a portfolio analyst with FBR Investment Management, "and the correction will be as well."
That's right, boys & girls. There is no mortgage/foreclosure crisis! But there is a long over due market correction to pop this highly over-inflated real estate market. And the most precipitous drops in real estate prices are in the 'tourist traps' - Nevada, Florida, California - the vacation/second home capitals of the U.S. of A. This is not ma & pa being preyed upon by evil bankers and thrown out in the street with all their kids.
Youngblood's forecast "is quite plausible," said Nicholas Perna, of the economic consulting firm Perna Associates. He finds it especially significant that the smart money, investors in the S&P Case/Shiller Home Price Index, are still buying futures as if they expect prices to continue to plummet.
The index, which tracks the sale price of specific homes as they are sold and resold over the years, is considered to be one of the most accurate home price indicators.
This correction was inevitable, in Youngblood's opinion; home price gains had simply out-paced income by far too much to be sustained.
Historically, home prices have averaged about four times wages. Whenever homes got significantly more expensive, people could not afford to buy and home prices fell back.
Plus, the shake out in the sub-prime debacle helped matters along. But not all is doom-n-gloom. Like the title says, "It's a Buyers Market."
Not all analysts are pessimistic. Richard DeKaser, chief economist for National City Corp (NCC, Fortune 500) points out that, thanks to the price declines, the national market is the most affordable it's been in years.
Of course, there are plenty of wild cards that could affect home price trends, such as the election, Congressional legislation, unemployment, gas prices, and interest rates.
Shop wisely, and prosper.
And for those home owners not interested in selling your homes, just sit tight, be patient, and contact your local county assessor to request an adjustment - which will reflect your now lower property value which, in turn, determines your property tax.
Sit tight, and prosper.
