With the crash of the U.S. housing market in the late 2000s, many interested observers have watched with great interest to see when the bottom of the market has been reached.
From investors to first time home buyers, the question as to when to buy homes in the current climate is key to making a wise decision. From the mid 1990s through the mid 2000s, the housing market grew at a record pace. It was an easy decision to buy into the market, as properties’ values soared year after year. This housing “bubble” allowed many to accumulate significant equity in their homes, without having to give much thought as to when and where to buy. With the bubble bursting the way it has, driving the housing market down to pricing not seen since the early 2000s (and in some areas, even earlier), it has given many potential buyers reason to pause as they consider the wisdom of putting their capital into such a slow to negative returning investment.
While there is still much concern regarding the volatility of the U.S. housing market, many experts feel that we are at, or near, the floor of pricing for homes in the U.S. Key factors, such as location (the most important consideration in real estate investment), record foreclosure rates allowing for a tremendous number of bank-owned homes which can be purchased for below traditional market pricing, and mortgage interest rates (which remain low) make purchasing in today’s climate an attractive option. However, the possibility remains of prices being driven even lower, in part due to the more stringent criteria being used for mortgage approvals, the continuing struggles of the U.S. economy, and the unemployment rates, which hover in the 9% range. Fewer qualified buyers means a housing market in the US that remains very soft.