I’ve read so many blog posts, news stories and websites that have either in the past predicted or are now predicting that housing would reach bottom in 2006, 2007, 2008 and now the latest information is that it will reach bottom in the summer of 2009. My head is spinning from all these predictions.  I am sure we will be hearing completely new predictions as this financial mess is sorted out.

Has Housing Hit Bottom? Portland Real Estate

Alan Greenspan famously declared the worst was over back in November of 2006. The National Association of Realtors® called the bottom a few times starting in May of 2006.  Kiplinger’s Personal Finance magazine believed housing prices nationally would bottom out in 2008, and stated that the recovery for housing markets would be slow (gee – where’s that new information?).  Plenty of other economists and real estate analysts have attempted to do the same - and of course they’ve all been wrong.

Economy.com’s chief economist Mark Zandi, Goldman Sachs (GS, Fortune 500) economist Charlie Himmelberg, S&P managing director David Blitzer and S&P senior economist Beth Ann Bovino have all agreed and stated that home prices would stabilize sometime during the summer of 2009. According to Robert Shiller, of S&P/Case-Shiller fame, he has amended his chart (above) and says the bottom now will be in 2011.

Problem is, no one really knows for sure when the bottom is or will be.  If we had listened to some of the reports above, you and I, would have been wrong.  They’re supposed to be the “experts” the “economists” who are in the know.  What do they really know?  Why would anyone rely on them to predict when housing will hit bottom? When inventory levels are at an equal level for both buyers and sellers with 5-6 months of available homes for sale, and sales increase after 2-3 months and continue to go up, only then will we know that we had reached bottom.

The American public is hungry for information.  They, and I want positive news and I can almost feel and hear it from the readers of my blog.  It isn’t because of any comments I’m receiving, but I hear it in the panic on Wall Street, I hear it in the news, and I hear it on the streets. I can also see it in how people are searching on the internet and then somehow finding my blog.  The words they are using to search for information from the web leads me to think this way.

The Old Rule Books Aren’t Working

Today I read an article that even the “so-called” experts say this financial crisis isn’t following the “rule” books, they don’t know what to think and they don’t know how to react.  If these experts don’t know, what’s the general public to think.  In my blog post “The R Word and the Economy”, I alluded to the fact that long-ago I’d given up relying on what any economist had to say. They’ve been wrong.  They were wrong then and they are wrong now.  It’s not because I know something more, it’s not because I know they are wrong and I know better, it’s only because I see whatever they are doing isn’t working.

With all the financial markets in turmoil, your guess and their guess is just as good as my guess!  This global meltdown should give you some clues that no one really knows.  Apparently no one saw this coming and when there was doomsday no one knew what to do.  How can these economists, with their charts, their predictions, and their guess-timates, give credence to whether there’s been a bottom?  Honestly, what do they really know? They certainly didn’t know enough to ward off this mess we’re in.  They have all at length told us where they thought housing and the economy was and they were all wrong.

There are many readers of my blog and other blogs who don’t believe in the “Buy Now” commercial in today’s financial climate.  I believe there’s a problem with that belief.  Actually, it goes back to what got us here in the first place.  Housing was never intended to be your ATM machine.  It has always been to raise families, build memories, having a place to call your own.  Somewhere it seems most of America has lost what housing really is and should be.  Unless it is a really good buy, there are those who won’t invest.  I understand wanting to make a good investment in the decision-making process.  I understand you don’t want to lose money.  However, real estate, over the long term has always been a good investment.  Yes, it goes up and yes values go down. If you try to analyze it down to the penny, you will never buy and you might not be making a good decision for you and your family for the long-term.

There have been times when I’ve sold houses of my own when the economy was good and also when the economy wasn’t good.  I’ve lost money and I’ve made money.  Somehow, it has always balanced out.  During my 33-year career of selling real estate, I’ve seen lots of recessions and financial meltdowns.  I’ve sold thousands upon thousands of houses and you don’t always make money.  You should buy the best house you can and the best house you can afford to buy.

In Europe, houses are passed down through generations.  In many cases, several generations all live in the same house.  You don’t buy a house in Europe with cabinets, appliances, toilets.  You get an empty shell.  Recently I was showing houses to German clients who asked whether all that came with the houses here.  Understanding why they asked, they were pleasantly surprised how much we get when we buy a house here in the U.S. Being born in Germany, I still have family there.  My family has lived in the same home for generations.

Portland Real Estate

Times are tough right now, no denying that.  However, I hope this financial turmoil brings us back to the things that are really important such as making a home, raising a family, saving money, not getting into credit card debt, not having to beat the Jones’ by out purchasing them and buying bigger, better, more!  It isn’t about making the quick buck, it isn’t about getting “rich” buying and selling real estate. A house is a place to hang your hat, to feel the warmth of a fire, to grow flowers, to watch the kids playing in the backyard.  Those are the things you can’t put a value on because they are priceless.

Sometimes the best rule is that you need to do what’s good for you and your family, when you want and how you want, regardless of what the so-called “experts” are saying because, you know what, no one really knows for sure!

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