Merrill RE Forecast 2008-2009

According to a Merrill Lynch report, home prices will drop 15 percent this year, and declines will continue in 2009.

Also Treasury Secretary Paulson said fews days ago: “The Worst Is Just Beginning”

Guys: Bad news coming every other day. Only good I can derive from this is more BPO work in future.

I think information like this published on a national level is really misleading to the general consumer. Real estate is so "regional". There are areas of the country that aren't really suffering at all, and other areas where there is only a moderate slip in the market. Then you have where I live- darn near the top of the "foreclosure capital of the country" list and houses are selling. Yeah, prices have dropped significantly, but the drop in prices (and interest rates) has brought out the first time buyers and investors. Yes, it may be true that the worst is yet to come, but I think that really depends on where you live.

Not trying to start a debate here- just my $.02

LaceyF,

It is regional I suppose, but will probably effect everyone before it's over. I have always felt that the media and economic 'experts' that rah rah rah'd the market as it went up, claiming that this time is 'different' than other cycles, now have an obligation to tell the truth about what is in store so people can make informed choices.

I remember reading reports from the CAR economist thinking to myself 'where did they dig this guy up from, the market always goes up and then it goes down.' Statements about the weather attracting buyers, about the new influx of people to the area, about all these new jobs that will require housing, about the shortage of housing - was all an opinion presented as fact.

Every once in a while I still come across a story about how we may have it bottom and it is really a disservice to the public as well as unfounded.

Many of the supposed 'know-it-alls' have been forcasting prices to start turning upward towards the end of this year.

Ya right! Do they have any clue how many more ARM's and 80/20 mortgages are ready or soon ready to collapse? More work for us, but it also means that this market will be here for a few more YEARS until all these consumers caught up in those type of loans and gone belly up have cleared out. Once that has happened, the REO driven market will turn, THEN we'll see the market normalize.

Yes, it could get worse for a while. I agree with Merrill...

CA,FL,MA were some of the fastest appreciation markets and also overinflated and volatile.There are some states that WILL appreciate in value this year.This blanket statements show many people do not really understand economy,localized market trends,and cycles.

There are a lot of loans set to ratchet up but there are also quite a few people refinancing those loans to fixed ones right now. I think there are parts of the country that haven't hit bottom yet, but those are mostly areas either hit hard with unemployment problems that aren't going to get better, like Michigan and Ohio, or places were speculation drove prices to levels so unsustainable that a child could have seen this coming. Areas that don't fit into either category are probably through the worst of it, in my opinion. There may still be some problems but I'm starting to see prices leveling out and even rising in more stable neighborhoods. There are still a lot of foreclosures in areas where junk loans were peddled hard to people who couldn't afford them, but in most areas things are starting to look more normal around here. But then, this area of the country didn't have a huge bubble run up, our market started to level out and even decline a little bit by around 2005.

Oh, and I wonder if Merril Lynch is trying to keep people scared of real estate so they invest in stocks and bonds. Personally, I'm buying real estate. I think this is probably the best market for investors since the 80's, maybe better. And don't you wish you had bought a lot of rental properties back then when they were going for a song? I know a guy who bought four houses back in 1985 at foreclosure auctions for under $70,000. They are valued at almost a million now.

Thump, thump, thump.... What's that? Oh, it's raining REOs!! Woo-hoo I love when that happens. Sorry but I gotta be honest.