This is the last entry in this week's series on the recovery of the housing market around Bellingham, WA. I started this series of entries because of the question I am most asked: "When will the market recover?" It's not possible to accurately answer the question. But we've looked at data to make an educated guess.

 

To summarize the data:

- the number of homes for sale in August 2011 is about half of what it was 5 years ago

- the average sale price was up to $290,000 around 2007, and is now $260,000

- the number of homes sold in 2011 is about one-third of the number of homes sold in 2005

 

So what should people do who want to either buy or sell a home these days? Is this a good time to sell? Is this a good time to buy?

 

I think the market is close to the bottom. The data show a slowing of price drop. And in the past few months, price is leveling off. I do think prices will still drop more, perhaps a few percent. One factor contributing to price drop is that we are just beginning to see foreclosures--some estimates are 4,000,000 more. And foreclosures in a market drag the market down. Also, and this is the biggest factor, the economy is still very unstable and the preception of our economic condition is bad. As long as their are not more jobs, as long as Congress fights and doesn't work toward solutions, as long as the world economy is shaky, we will not recover. The housing market will remain in trouble.

 

If you are selling a home and buying a home, generally no problem. Most likely, you will experience a loss on the sale of your home. But you should make up that loss on the purchase of a home. If you are selling and not buying, what should you do? Accept the fact that prices are down to 2004/2005 prices and move forward. If you can hold onto your home, you may want to do so. But holding on could be years. The price you get this year may be better than the price you get next year, or the year after that. If you are buying, what should you do? First of all, prices appear to be at the bottom. But they may not be. As I said, they may still slide a few more percent.