So what does the bottom of a residential real estate market look like? Maybe the truth is that nobody can really name the bottom of any financial decline with precision, but there certainly are metrics that make a relevant historical measurement.
It’s in the numbers! According to CNNMoney, this April, home ownership in the U.S. dropped by 1.1% to 65.1% as compared to its year 2000 level. That’s the biggest drop since the 1930s during the Depression era when it dropped a whopping 4.2%.
So what does this mean? Is it a bottom? Who knows? Let’s assume there’s some crazy Black Swan. The unpredictable event that comes out of nowhere like a meteor and slams into the side of the world and makes our discussion about paper money vs. gold seem ridiculous!
So why not take it for what it is? It’s a major league pricing correction. It needs to happen with any asset class that gets over-priced and out of control. Just look at the affordability index in most cities during the bubble…many people were blocked out of buying because they couldn’t afford to. Our solution? Bend the rules and give the money away…oopps!
This is the time buyers have waited for. Actual affordable housing based on market pricing…not some government “ten-fingers” program. Get out there and sift through the rubble because there’s housing gold everywhere.