Homeowner Confidence Shrinks (Yet Most Think the Worst is Over)

Hi DebtFree, nice to see you again.
I say “unfortunately” in the context of the homeowners who responded to this survey. Most homeowners would agree it’s painful to see your home’s value decline (and thus why, as you state, many may be in denial).

But you’re right that for a buyer – particularly a first time buyer without a home to sell – declining home values are a fortunate circumstance.

It really depends on the homeowners of the property, because if your home is still in auction for a few months, that’s the time they increase their prices, and it keeps on coming until someone bought it.

Real Estate cycles (17 of them so far) are predictable for the most part with some exceptions. If you research these cycles, the next peak is projected for 2022. Yes, Real Estate will come back. Yes, lots of money will be made. However, when to get in or get out is the challenge only for the greedy and the short termers. As a long term investment, it holds. As a write-off with a potential good rate of return, it stands. Currently, the downturn is trying to find its legs. So far, it is still in a Yoga position. Out of Food, shelter and clothing, shelter has been compromised. Until that is restored, there will be no confidence or recovery in the industry or economy. Wall street killed the goose that layed the golden eggs…namely the American dream of owning a home. What folly. What shame. What greed.

Out of Denial?
Good, now only 4 stages of grief left to go.
We need to grieve the loss of a market that has had a slow, lingering death. The market as we knew it is gone. Builders, brokers, consumers, vendors and investors would benefit by understanding the grief process.
Five Stages Of Grief
1. Denial and Isolation.
Are we still in denial? The comparables and appraisals are showing huge differences between 2009 and 2005-2007 numbers. At first, we tend to deny the loss has taken place, “this can’t be happening” and we withdraw from our usual social contacts.
2. Anger.
Angry at the banks, angry at the buyers who should have known better, angry at the agents and brokers who should have known better, angry at the government who should have known better. Angry at ourselves for thinking we knew better. Even if, realistically, we know that anger only delays progress.
3. Bargaining.
If you will take the listing at a reduced rate, I can get my price. If you cut out print advertising, what can you do to make up the difference? “If I do this, will you take away the loss?”
4. Depression.
Anger turned inward; numb and number. Frustrated. Bitter. Keep guns out of your house.
5. Acceptance.
This is when the anger, sadness and mourning have finally tapered off. It is what it is; accepting the reality of the loss is the final step. True acceptance. Not resignation. Accepting that what was is what was. That what is is something entirely different.
We have recently helped a family through this process. The asking price was $20,000 less than it would have been 2 years ago. It received multiple offers, sold and closed in 45 days to solid buyer at w/ good credit scores with 20% down.
Acceptance ensures focus on opportunities.

Nice write up. Any followup for 2010?