I can see where you are coming from but with the contrarian view the bottom will be reached when Newsweek and other MSM completely give up on housing and declare that buying a house is a financial suicide.

I have a rather simple way to determing the bottom...the median home price in the area of your interest has to be at max 3 times the local median income then and then only bottom will be reached.

Ahhh DARN IT!!!

With that headline I was expecting some 'adult images' LOL!

People are nutz.
What are these owners worried about?
Are they selling tomorrow?
Sheesh, the RE market is cyclical. If they live there for 3-4 years, they'll be ok.

One thing about Fl market. The type of appreciation that Fl enjoyed, was not normal. My guess is that prices in Fl will continue falling for a while, until they reach a "normal" price range.

The Media scares everyone to death. I wish this Doom & Gloom would stop. I'm not in the market, but see that other than RE, things are ok in the state. That tells me that RE is reacting to the Media.

So what is bottom exactly? Lots of people talk about it as though bottom means a return to sunshine and appreciating home values. Does it mean a balanced market? Does it mean a return to the boom years when housing was the investment of the moment?

What happens after bottom? After the 80's boom, we hit "bottom" in 1990 then prices, area-wide, went flat for almost a decade...some houses plunged an additional 20-30% after "bottom' was called. Other houses (newer houses) increased. Sales were slow and sluggish.

So what does bottom mean? I'm not sure I know.

Bottom,from my thoughts, is a time(and likley longer then most would like) of stagnant prices..No longer serious declines,but no significant appreciation beyond inflation rate....Your home will simply be that, a home...Not an investment in regards to making fast $$, but a place to live...

The 'bottom' also will not form in all areas simultaneously. It'll be a gradual thing moving from one area to another. Normally, those areas that boomed the most will fall the furthest & bottom first. Last go around, New England was the last to tumble & also the last to recover. I don't think anybody can call a 'bottom' on a nationwide basis. As with many other bear markets, there can also be a pause that fools some into believing a bottom has formed only to find prices begin sliding again. IMO, we're in the 2Q & as we all know...there can be a lot of action after half-time. (had to phrase that so I could sneek in a..."Go Pats!")

/tricia

We sold our FL house in November 2005. It had been on the market for a while with one contract that fell through and then ultimately a bidding war at the end to over the asking price. For the entire year or maybe 15 months before we signed the closing papers, I was absolutely positive I was in a race against time to make our "paper profit" a reality, before the window closed. I used to go walking every morning with a neighbor, and we would debate whether there was an end in sight. My position was that there was, and it was coming soon. Her position was that there was not, since people kept streaming into the area from South Florida (having made huge profits on their homes there) and other locations as well. I was on fire to get the deal done and leave.

I am no financial guru, not by any stretch of the imagination. What had me convinced that there was a bubble, we were floating around in it, and it was about to pop, was just common sense. Florida is a service economy. There just are not a lot of high paying jobs there. It's always been that way. Retirees found it attractive partly, maybe largely, because of the affordable housing costs. But even retirees generally tend to have fixed incomes. I just knew that there was not going to be an endless supply of people who could afford $200,000++ mortgages in Central Florida, even with great interest rates. I knew it was not possible.

Our house sold for $325,000, and the lady who bought it financed 100% of the loan. She was also a real estate broker. I'm sure she is happy with the home itself, because it really is a great house. But she can't be thrilled with the fact that she is upside down in a house. And she was IN the business.

It was like everybody was taking a drug, and the effect was that the drug lulled them into believing, despite all common sense and just the obvious "nothing can go up forever" law of nature, that there really was no end in sight and the gravy train was on an infinite track headed straight uphill.

It still floors me, a few years later. We would have been okay if we'd stayed in Florida, I guess, but I would have been so full of regret for not following my instinct and seizing the opportunity to get out while the getting was good.

We got a ways to go. At least 12 months,prolly longer.

My opinion, worth price charged.

Bottoms from my brief undertsanding will be realized when people actually buy at auctions. Case in point I attended an auction of 46 properties in Naples and Bonita Springs FL two months ago. 45 people showed and only four properties sold with five bidders.

Four properties were new homes with the builder offering full warranties(walk thrus were available before the auction)..only two sold. New neighborhood apprx 2700 sf landscaped and complete with pool. A realtor had been offering similiar home(same builder) next door to one being auctioned. Had it listed at $449,000. The gavel went down at $275,000 with two homes nobody bid on.

Two 1/4 acre lots(city streets/water etc) sold for $ 50,000..all other properties will continue to sit until the "bottom" is reached. These properties actually sold for $ 250,000 two years ago.

Here is a link that might be useful: hardwood floors help sell homes faster

i have no pity for the owners in this article, as they thought the run-up would continue and their home or "investment" would further appreciate..A home is a home, and if it is worth more when you go to sell it, thats great, and if not, oh well

The wife was left money by her father. They can make lemonade out of those lemons and realize that they probably couldn't afford to live like this without the money she was left. Maybe the father would have been happy to know they chose to build a house, live in this dream and have the chance to learn a lesson from it.

When my dad made his will, we talked a lot about what he expected when it came time for us to collect if there was anything left. My dad didn't want it spent foolishly, but for us to invest some and bank the rest so that if the time came and we needed it, it was there. My dad came here from Hungary in the 50's with $50 in his pocket and after struggling for 50 years, had finally gotten his "American Dream" where he could retire comfortably. He didn't want us to have to worry like he did.

It's not just builder's remorse. Since the home was built partly with an inheritance, Roger feels a special responsibility that the money left to his wife by her father turns out to be a wise investment. It doesn't help that because Roger served as his own general contractor he chose many of his home's pricey extras. Their house has a $40,000 epoxy-metal roof with a lifetime guarantee, hurricane-proof windows, super efficient insulation and an emergency generator. They're great safety and energy-saving features, but Roger doubts that buyers in the current market would value them anywhere near what they cost.

It's a good possibility that the next person won't like the kitchen that was put in, or the tile in the bathrooms. The built the house for them. I can't count the number of houses I walked where the owners either used cheap builders grade or it was so expensive & personal that they were looking for a specific buyer that liked their taste.

We sold our FL house in November 2005. It had been on the market for a while with one contract that fell through and then ultimately a bidding war at the end to over the asking price. For the entire year or maybe 15 months before we signed the closing papers, I was absolutely positive I was in a race against time to make our "paper profit" a reality, before the window closed. I used to go walking every morning with a neighbor, and we would debate whether there was an end in sight.

I was talking to my hubby's grandmother the other day, she lives in Coral Gables. She said a house sold within the last month there, still in the $500k range. I keep telling her to get out while she can but she won't. lol She loves it there and didn't buy the house to make money off of.

The bottom, in my opinion, will not hit before those who make multiples of the national median income can afford a starter house.

Or, more precisely, $28,800 times 2 (assuming two working parents) gets you $57600 household, times 2 (mulitple of the national median) gets you an income of $115200 which could buy a house of about $288K under old-school lending multiples of 2.5 times income.

A heck of a lot of markets have to fall a long, long, way before even their starter houses get down to that level.

This market is still so far removed from its fundamentals that if prices started going up again from this point, it would not be because we ever hit bottom, but because the bubble started rebuilding.

And I don't mean to come across as bearish or negative - it could be that the risks are worth taking. But at least look at risks with eyes open.

The 360 Degree Psychology of A Boom/Bust Cycle

Optimism
Excitement
Thrill
Euphoria
Anxiety - The Tipping Point
Denial - My market's about here edging towards fear
Fear
Depression Our Condo Resale Market
Panic
Capitulation - Is this Bottom?
Desperation
Hope
Relief
Back to Optimism

In the Depression my DH's father bought a lovely home in a lovely area for 30 cents on the dollar.

Today I read an article quoting a bank executive on selling foreclosed properties. He said the bank used to expect to get 60% of value, based on what the house would bring when repaired/refurbished. Today they are expecting 50%. Got a ways to go, IMO.

Same article predicts recovery for new homes as 2010 -- longer for sales of existing homes.