Dead Cats, Glendale Homes and the Economy

The full phrase is, “even a dead cat will bounce if it falls far enough”, and before you cat lovers out there start the hate mail, I didn’t come up with that phrase!!! It is a stock market saying. It is used to describe a market that is falling (a down market) but there is an “up” blip in the stats. If it is just a temporary blip and the underlying market is still bad or falling, it is a dead cat bounce.

So, is that we are seeing, today, in real estate? Certainly we are in a bounce of some sort. I have 2 offers out and both are competing in a multiple offer situation. I sold 3 houses in the last 2 weeks- all with multiple offers, all above asking. Inventory is down, time on market is down and, prices? Prices seem to be up, if only just slightly.

There are a host of reasons… interest rates are at all time lows, the federal tax credit is about to expire and there has been enough of a price drop that the low end in our market is affordable- if you can find one to buy.

But are we on the road to recovery or is this a bounce? Unemployment, consumer confidence and looming inflation are all less than ideal. And then there is the specter of the foreclosed homes. They are out there… and yet, we can’t see them. They are not on the market- but they are coming. When? How? When???!!

Some say they will hit us like a ton of bricks some time next year.  Others (including a very respected foreclosure specialist in this area) feel the banks have enough TARP money to dribble these homes on the market over the next several years.

I think the only safe thing to do is to pay attention to NOW and stop trying to forecast the future.  Is it the right time NOW for you to buy or sell?  Is there a house you want NOW?  Betting on the future is a gamble, pure and simple.  You could win- or you could lose.

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