Six months from never
For those of us who lust after real estate the way certain overexposed television-turned-movie characters lust after designer clothes, "six months" has become a mythical countdown to our version of the Barney's warehouse sale. Perpetually put forth as the amount of time before the housing market reaches its nadir, "six months" is part mirage, part the product of a highly speculative math formula. It's the magic number that keeps us believing that someday in the near future, all deals will transform into quantifiable steals.
The magic question, of course, is six months from when? A year ago? Six months ago? Now? As a longtime member of the Church of the Sunday Open House (a group that does not discriminate on the basis of one's ever actually buying a house), I've been hearing people recite the gospel of "just wait six months" since roughly the fall of 2006.
Obviously, there's been some validity in that advice. Since reaching nosebleed heights in 2005, the real estate market has slowed so precipitously that some are comparing it to the Great Depression (not that any of those people actually lived through the Depression). Recently, it was reported that prices of single-family homes were down 14.4% in March of 2008 compared with March of 2007. Moreover, in an eye-ball catching combo of celebrity gossip and real estate news, TV personality Ed McMahon is in danger of losing his Beverly Hills estate to foreclosure. According to the Wall Street Journal, McMahon is about $644,000 behind in his payments. The property, which has been on the market for two years, has an asking price of $6.25 million.
Are you thinking what I'm thinking? Wait six months and maybe you'll be able to pick up the McMahonsion for a cool million! Homes listed in the $900,000 to $1.5-million range could be $450,000 or so. Oh, and that two-bedroom Craftsman bungalow that has the original built-ins but needs just a tiny bit of TLC? That will be free.
Eager to get a start date for this blowout sale, I called five real estate experts and demanded definitive answers. Here's a sampling:
Cindy Allen, Los Angeles blog editor of Redfin.com, an online real estate brokerage:
"Everybody talks about 'the bottom of the market.' One of the things people think is that the bottom is going to hit and come bouncing back like a rubber ball. But I think it'll be more like a splat and stay splatted. I don't think 'six months' means much right now."
