Expect a good market by Jan’09
That’s the update relative market absorption chart, for Montgomery county MD. In a nut shell, this chart compares the fraction of sold inventory to a year ago. So, if a bigger fraction of the homes on the market is getting sold compared to a year ago, this chart will be higher than 1. If not, then it will be less than one. Obviously, it’s been less than 1 since approximately March 2005 with only a slight peak on Feb 2007.
Yesterday, news got released that the real estate market even went lower. We’re still slowing down as long as this chart is less than 1. However, it looks like there’s a trough (bottom) being created, and no one knows whether it is a global or local bottom. In other words, no one knows whether the market will start reversing or go down again.
Whether this or that, I guess everyone agrees that the market is not only down now, but full of blood. That’s why there’s many investors roaming around buying foreclosures, short sales or other distressed properties.
However, there’s been a couple of WSJ articles forecasting that the worst is over, and the real estate market will bounce back. That’s why I believe that by Jan’09 things should look better - at minimum.
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