1. The housing market won’t be quite as newsworthy
You will be able to listen or read the news and not hear words like ‘foreclosure’, ‘bailouts’ or ‘housing bottom’.
2. Balanced market
Real estate prices are derived by supply and demand. If the demand is high and supplies are low prices rise. If supplies are high and demand is low prices drop. Your market will bottom out when inventories have dropped to and there is a greater balance between supply and demand. The real estate industry says that 6-7 months represents a balanced market.
3. Investors
More investors will feel comfortable about investing in houses. When you see a good number of investors (no flippers) buying good values than the market is bottoming or is about to bottom out.
4. Lenders will loosen up
The real estate market depends on people’s ability to get financing. There are only so many cash buyers to go around. The banks are very nervous right now and rightfully so. Banks want to lend money but they don’t want to make any bad loans. When you see the banks loosen with their lending guidelines that is a pretty good indication that they think the market has stopped falling or will stop falling soon.
5. Optimistic
More and more people will be optimistic about the future. There are many people buying houses and stocks and these historically low levels. If the market prices get back to where they were, regardless if it takes 5, 10 or 20 years, there will be a lot of wealth created.
There will be more than just 5 signs to signify the housing bottom. I am a Realtor in Sarasota, Florida and I am seeing signs of a bottom:
- Our inventory levels are much lower (not quite low enough yet).
- I wouldn’t classify lending as loose but it is a little easier to get a loan today than 6 months ago
- I am seeing more optimism in the market as these bottoming signs are appearing and home buyers are getting great values.
What is happening in your market?
{ 2 comments… read them below or add one }
In my market (Wisconsin) lenders are tight. Appraisers are even tighter. 700 credit score & a steady job; good luck getting a loan. Buyers & Sellers are in a stalemate right now.
Lenders are also really tight here in California – would think it’s still the same in most places in the country – we have less inventory – but that seems to be because banks are not releasing inventory that they currently own all that quickly. Some of these factors are definitely in place in my market.