Mohamed Ibrahim’s Blog

An article appeared on the wall street journal online, suggesting that the housing troubles are over. There’s some interesting analysis over there that shows why it is over. Another article appeared yesterday also on WSJ, that shows more charts suggesting that the housing problems are over. This one shows a chart showing that the housing market reached the same bottom from which the housing market bounced up every time. Basically, it applies a similar theory to the support and resistance ideas used in the stock market.

However, there’s a couple of things that tells me we might still go in the flat bottom till the end of 2009. First Fannie Mae just expected prices to further drop. The chart in the second WSJ shows the market bouncing up after a recession, and we’re not in a technical recession yet.

I will update the chart that I used to analyze my local market, and will share it on the weblog. I agree that we are in the market bottom, but I think this bottom will be little bit more flat than just April of 2008.

News have been everywhere today that mortgage defaults are even higher than before. Foreclosure rates are increasing, because home owners give up even before their adjustable mortgage resets. Worse, two days ago a very known investor (Warren Buffet) became the most wealthy person, said that as far as he’s concerned we are already in a recession.

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The housing bubble wrote a not so short post about housing troubles in California. Well, it’s not only in California - may be as far as I recall that California was one of the leading states to reach the downhill. However, in DC metro areas the bubble also bursted strongly.

We’re seeing an exceptional opportunity to buyers especially those with cash in hand. The usual qualified buyer can sometimes negotiate around 10% of the property’s asking price, and that for upgraded units, with new appliances and freshly painted - and I’m saying that they are excellent. Properties that need work, well, will be negotiated even more.

Its not over. The CEO of country wide and KB homes both say the US will still face a tough market next year. All the people I know and who’s working full time in real estate say that yes they feel the crunch of the market. It’s not the normal market like before, and when I say normal market I mean fair one. At one point of time the market was advantageous to the sellers and was unfair to buyers and things started moving around till the market became unfair to sellers. In between there was a slight lapse of what we call a fair market to each, and it was not very long.

In my area and in average one out of eight listings sell. That’s my own stats & analysis. Two month ago approximately, it was one out of five. And as you can see in GCAAR’s report, it seems more expensive houses are being sold than less expensive houses, compared to earlier this year and last year. That’s the only way I can explain the continued rise in the average and median prices of homes !