The Great Real Estate Shakedown

So the great real estate shakedown of 2008/2009 continues.

Lot of interesting statistics are being thrown around, none of which is as interesting as this one:

The median price fell 11.3 percent to $183,300 from a year earlier, the largest year-over-year decrease since records started in 1968.

What was that? Home prices always go up?

Hahahaha!

I bet Lawrence Yun, the Chief Economist of the National Association of Realtors (NAR), has had a hard time eating his own foot so many times over.

Of all the so-called experts who’ve been proclaiming real estate is a good investment, he’s probably the biggest wanker of them all. Only 13 months ago on October 10, 2007, Yun said:

The speculative excesses have been removed from the market and home sales are returning to fundamentally healthy levels, while prices remain near record highs, reflecting favorable mortgage rates and positive job gains.

Uh-huh. Right.

Even more recently, Yun proclaimed on July 24, 2008: “I think we are very near to the end of the housing downturn.”

Of course, *IF* you believed Yun and the NAR (and you shouldn’t), it is ALWAYS a good time to buy a house and the recovery is ALWAYS just around the corner.

Be careful who you listen to.

I expect we will see home prices drop significantly between now and Spring 2009. I wouldn’t even dare to venture when we’ll see prices start to recover. That could be years away.

Since the run-up in real estate prices began circa 1996, I wouldn’t be surprised if we see prices returning to pre-millenium levels.

Naturally, only time will tell.

In the mean time, best to liquidate your real estate, rent, and wait out the storm. But that’s only if you believe an uneducated hack like me. (I’m no expert, consult your financial planner, yada, yada, yada.)