Consider this quote from a Northern California Realtor, Byron Alvarez of REMAX:
"We’re going to be sitting here 4 or 5 years from now when we’re at the peak of the up cycle saying: ‘Remember ‘06 and ‘07?’ We should have been buying everything on the market," Alvarez said.
His rationale for this statement? The amount of supply and the willingness of sellers to offer concessions.
Byron Alvarez of the REMAX Real Estate Center, a 27-year real estate veteran, expects prices to jump by 10 percent or more in 2008.
I have to strongly disagree with this prediction, especially in significantly overheated areas like Northern California. What is not calculated in this article is the fact that the foreclosure tidal wave is just starting! Every one who is on the bull side of the housing market is talking about 2007 as the bottom which doesn’t compute with the numbers.
Mortgage experts have clearly outlined that 2008 and 2009 are the years where many of the adjustable rate mortgages will begin to reset, and while 2007 will be a banner year for resets in its own right, 2008 is really when the reset party kicks off in earnest.
This year, almost $370 billion worth of first ARMs are resetting. More than $250 billion worth will reset in 2008 and 2009 and another $700 billion will do so in 2010 and beyond…
The impact of these resets on home foreclosure has yet to be accurately calculated.
It is irresponsible of sales people to be calling bottom just to get some more clients in to homes before this thing sorts out. I have no problem with people buying homes, I have no problem with Realtors helping people find homes. I have a big problem with people throwing out quotes like "home prices will increase 10% in 2008" with absolutely zero explanation in the face of mounting evidence to the contrary.
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