According to Altos Research, home prices will start 2011 at lower levels than they started 2009. Yeah, they’re pretty pessimistic over at Altos. You’d think out in California they’d be a little more relaxed.
They, like oh, most of us, have heard about the “shadow” inventory that’s just looming in the background. Well, they predict it’ll drive prices down for the rest of the year.
They’ve been watching foreclosures and market trends and they think that inventory is starting to make its way into the market.
It kind of reminds me of this oil plume lurking out there in the gulf. It too is for sure out there, suspended somewhere between causing massive damage, and moving in slowly. We’d like to believe that we got the oil taken care of, but most of us are smart enough to know that’s too good to be true.
Same thing with the housing market. Those foreclosures didn’t just disappear. For us real estate investors, we’d like to believe that prices will keep rising. But maybe Altos is right and that huge wave of properties is set to make landfall.
Add to the fact there are increasingly less buyers out there for those properties (due to unemployment, bad credit ratings, etc.) it’s set to make prices tumble.
We’ve been writing about this problem since the end of last year but the results are about to be felt. It’s clear that we’re all going to be needed to move these properties. So it’s time for daring investors to brave the uncertainty and get moving.