IS it time to buy yet?

I have to admit that buying in this market has not been so attractive in a long time.
Prices have fallen to great depths, with 50% off peak value in some areas, and mortgage rates are close to all time lows.

But the Question still remains, "Are we at the bottom yet?"

Here below is an article from Lawrence Yun, the Chief Economist of the National Association of Realtors.

America is an exceptionally special place. The electing of a minority candidate will go down as one of the most historic events of the country. However, the peaceful transfer of power of the most powerful man on the planet, which many Americans simply take for granted, is even more impressive to me as a foreign-born person. The New Year is already many days past, but after waiting for and witnessing the Presidential Inauguration yesterday, 2009's new beginning seems like it has just started.

For the housing market, the year 2009 will be looked back on as a rare moment of immense opportunities. Mortgage rates will be at 50-year lows. These conditions offer refinancing relief for a vast number of homeowners and a unique chance of ownership for a sizable number of households. Home buying is not a snap decision. Rather, it takes time to digest information on new favorable opportunities, get into the mental mood of taking on the responsibility of ownership, and finally start searching for a home, which can take several months. Past empirical relationships say that there tends to be about 3-to-5 months lag time between lower rates and an increase in home sales. Even in times of economic recession home sales respond more to falling rates than to economic conditions. Remember, even in the hardest times, more than 90 percent of the workforce will have jobs. The record low mortgage rates which appeared in late December, therefore, may just well lead to sustainable rising home sales just in time for the spring buying season. Or maybe not.

Underwriting standards have swung from too lax standards during the boom years, to now overly stringent conditions that are shutting people out who may not have pristine but yet good, decent credit. Furthermore, many hard-working, tax-paying, and financially successful individuals are essentially shut out of the marketplace because they need jumbo loans. Sales of those homes priced less than $400,000 have held steady in 2008. But sales of pricey homes over $750,000, generally requiring a jumbo loan, declined a whopping 47 percent because the historically low rates do not apply to them.

Though we can be hopeful that the coming spring season will be better than the last, more clearly needs to be done. Foreclosures are painful for the families involved, hurt communities, harm bank balance sheets, and do not reflect well for the country. They also ruin the comps. We need to assure that only genuinely qualifying buyers can enter the market in order to achieve sustainable home ownership. But lending standards cannot be permitted to be overly stringent or that low rates apply for some people but not to others. Loan limits have to be raised on fairness issues and 'underwater' homeowners should also have access to low rate refinancing loans. There are an estimated 12 million homeowners who are 'underwater,' nearly 10 million of which are fulfilling their contractual obligations in making mortgage payments on time.
With nearly all financial institutions getting capital injections via TARP funds on the backs of U.S. taxpayers, heavy pressure needs to be applied to them bring lending back to the middle ground - neither lax nor stringent. Pressure also needs to be applied to bring business order to the frustratingly long process of short sales. It's a full court press in Washington to get this done. Any financial firms receiving taxpayer funds should expect neither a free lunch nor to be free of pressure.

Let me end by my observation on the great respect shown by people who did not vote for President Obama. The love of their country appears first and foremost. Unlike the inauguration of 2001 and 2005 when massive numbers of protesters shouted out and aggressively demonstrated in trying to ruin the celebration of the nation's chosen President, there were no visible incivilities in yesterday's inauguration. The fact that President Obama is starting with a near 80 percent approval ratings, while having won 53 percent of the votes, says a lot about the country and its people. The love of the country appears to be unconditional, rather than being qualified by who won. Americans are giving the benefit of the doubt to the new president and wishing and hoping for the best for the country that they love. Over time disagreements will surface and heat up. That is healthy for democracy. But for now at least, it is a fresh beginning for the country with immense new opportunities.