When real estate insiders grow pessimistic...

Posted by: Dean Foust on March 6, 2007

Real estate professionals are inherently optimistic. Home prices going up? Now’s the time to buy, before they go higher! Home values collapsing? Now’s the time to buy, when you can scoop up a bargain! I’ve had real estate agents who, in the process of helping me find a house, rail about how the local real estate agents should pull their advertising from the local newspaper for being so negative (though as a journalist, I simply thought the local coverage was reflecting the reality of the moment).

So when I saw this article in this San Diego-area newspaper in which the manager of GMAC’s Mortgage group in Coast Mesa warned that we’re only “halfway down the mountain and we’ve got a ways to go,” that suggests that any talk that southern California has hit a bottom and is stabilizing is premature. When the pros are willing to speak openly about the problems ahead, you know it’s bad…

Reader Comments

Charles Reese

March 6, 2007 6:56 PM

Hi Dean,

I have a question. From what I have read concerning buying a home, is this the time to buy a home when the market is fluctuating like a plane out of control?

If it is, are sure that many people are not taking a chance of risk?

Just curious.

Thanks

Julie Emery

March 14, 2007 1:39 PM

Dean,

I'm a REALTOR in the greater Northern VA market and on the surface at least, it's all happy talk from local agents here. But some of them will privately tell you that they're just not sure we've hit bottom. And I definitely wouldn't suggest we've hit bottom yet. There's still way too much inventory, sellers are still reluctant to reduce prices and the subprime situation is likely to reduce the spring pool of buyers. I think it's too soon to call a market bottom.
Now they're are at least two of us to worry you!
Julie Emery

Dan Charles

June 6, 2007 6:16 PM

A friend recently listed his home in south Orange County, California. At his Sunday open house, no one came. No one.

At this point, the listing broker admitted he himself had just put his own home up for sale -- trying to run for the exit before the theater burns down.

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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