@Caprica: Yes the fact that I’m scared shittless probably means that its a good time to buy BUT the banks are still being stubborn. They send out their appraisers who tell them the house is worth some inflated price and then they give it to Realtors to sell. The PANIC is not there yet, close, but not there yet.

@CG: my first introductory meeting with investors didn’t go so well so I have to find some new ones. I’m the master of lowballing RE and getting a price I want, usually. :)

The key here is if what you want to get will be better five years down the road.

I myself am looking at properties as well. We bought recently (for a good price), and we are looking on the French Riveria and Laurentians in Quebec Canada. Have we found anything? Yes, but we are not bidding because we have the patience to wait them out.

What we have now is a buyers market. You start putting everything together, budgeting and start talking and looking. And if anything crosses your path you say sure I will buy it. Calculate a fair value and knock off 20%. The worst they can do is reject it…

If you weren’t scared shitless then there would probably be no opportunity. I would use your fear as a good sign that the opportunity is worth looking into

Now if I could only find a well priced laundromat in the city…..

The banks, much like the homeowners, are in a state of denial right now. They send out their appraisers and they make up ridiculous valuations (much like during the bubble) and the property sits there.

Some time in the future, like what you said, the market is going to be flooded when all the banks realize they have to start liquidating. Watch out for the Tsunami then!

I used that data to get an idea of what the Detroit, MI Metro area is doing. (I swear I live in a nice suburb and am not affiliated with the Detroit mayor or paying for his legal bills haha).

After messing around with some regression lines in excel, the chart looked like a clear downtrend, almost parabolic, and ironically enough, the regression line resembled a frown.

Also, I have some idea on how the banks try & sell the homes that they foreclosed on (atleast in Michigan) and know that there seems to be something like a stair-stepping method for dropping the prices until the property sells. i.e. They foreclose on a house for $250k & try and sell it for $250k for x months, if unsuccessful, they try at some percentage less than that, which is determined by some statistical model and then continue this process until it is sold. Because of this, I think there is a backlog of properties that the price will be reduced on because of these models, which will then cause the market to drop further. Keep in mind that my local area got hit really hard with foreclosures.

Just this past weekend I went house-shopping in Birmingham, MI and because of the state of the economy around here I am going to lease a house because its quite a bit cheaper than buying the same thing, especially when you factor in the negative appreciation. All of the houses I looked at, except one, were vacant. It may be worth your while to call up a realtor to see what % of houses that they show are vacant. Around here its 50%.

E-mail me if you want some more specifics.

Regards,
Eric