The Market is Coming, The Market is Coming; Part II

I was getting caught up on some of my technical reading and finally got to The Kiplinger Letter. The Kiplinger Letter is usually short, sweet and to the point, very much on topic, and usually pretty accurate. It's a great weekly read to keep up with the happenings.

The Kiplinger Letter issues on Wednesday, April 18, 2008 starts right off with:

"Dear Client:

Amid the housing doom and gloom...rising foreclosures, plunging housing starts, scores of unsold homes and falling prices...It's hard to even imagine a recovery. But still obscured in the ashes...Seeds of rebirth are germinating."

I could not have written it any better than they and they certainly reiterate what I have been saying all month long. The real estate market has started turning the corner! The January/February months were the bottom of the market in terms of volume/activity (not price/valuation). We will begin the slow crawl out of the hole that we fell into.

Now, don't get me wrong.

This does not mean that we are home free. We are in a pretty deep hole. We have a lot of work to do. And, we have not seen the bottom of the market in terms of price or valuation. We have only seen the bottom in terms of volume or activity.

Buyers are beginning to jump into the market when (and if) the property is priced to sell. The buyers see and smell opportunity. And, sellers are finally beginning to realize that if they want to sell their real estate they must lower their expectations and price their properties to sell. We most likely still have 9 to 12 months to go before we see the bottom of the market in terms of price or valuation.

The Kiplinger Letter put it very nicely:

"Home builders aren't finished with additional markdowns...up to $100,000 on homes once priced at $300,000, for example. And, they're sealing deals by adding flat panel TVs and other amenities.

But more and more buyers won't wait much longer to try and catch the absolute bottom price. With mortgage rates at low levels...under 6% for a 30-year fixed...qualified buyers are pulling the trigger."

Kiplinger's comments reflects what we have started to see around the United States in a number of geographic real estate markets.