The National Association of Home Builders just got an earful from economists about the real estate market. They were attending a forecast conference yesterday in Washington which doled out the “bad news” for their industry.
Predictions are we’ve haven’t reached the bottom of this current real estate market cycle yet. But why be surprised?
I know a lot of us are trying to read the tea leaves on exactly where the bottom of this pond really is, but I don’t think it’s all that murky.
Most of us think this real estate cycle will extend probably over into 2009.
So, yes, the [tag-tec]homebuilders[/tag-tec] are in a bind.
They overdid it. There’s too much inventory out there. That makes prices go down, eventually, even though some [tag-self]homeowners[/tag-self] haven’t realized that yet.
Will we fall too far too fast?
I don’t think so. I think the market will go back to what used to be normal and reasonable, before that last drunken sailor extended weekend that lasted pretty much through 2005-2006.
Is that really a bad thing?
I agree with Michael Moran of Daiwa Securities who was quoted today by CNN Money.
“I think it’s a blow the economy should be able to absorb,” he said. “The housing prices are holding up reasonable well. If you look at the traditional determinants of housing demand, they’re not that bad.”
So where does that leave us?
In a very good position to buy.
Deals are already out there and more will be forthcoming.
Maybe it’s bad news for the Home Builders Association, but that doesn’t mean we can’t rise to the occasion and make money.