How to know when we are NOT near the bottom of house price declines in your local area?

Jonness 2/21/2009

The following quick method can be used to determine if we are not near the bottom of house price declines in your area:

• Go to the tools section of this website and click on “ Median Home Price Charting Tool.”
• Select your city and at least 2 others that are close to it.
• Hit the “Submit” button.
• Do you see at least 2 quarters of flat to slightly increasing prices?

No: Your area has NOT yet reached the center of the wide trough that will occur at the bottom of this housing correction.

Yes: It is possible you are approaching a bottom in your area. It is important to understand that the data in the chart is not current, because the data is released the quarter after it occurs. Thus, you need to use whatever means necessary to determine recent house prices in your area. For instance, I live in the Seattle, WA area where seattlebubble.com does an excellent job of charting local house price trends. Once you determine prices have been flat to slightly increasing for 3 consecutive quarters, you should look to mainstream measures such as supply, rent to own ratio, and median price to median income ratio in order to determine if, “now is a good time to buy?”