Golf community announces bottom of housing market

In recent weeks, my mailbox has been hit every few days by emails from Brunswick Plantation announcing that economists have declared the end of the housing market's troubles and that sales of homes in Myrtle Beach are rising. "Top Economists Say Housing Market at Bottom and Economy Stabilizing - Time to Buy at Brunswick Plantation, Calabash NC," was the subject of the latest missive, which arrived today.
True, the latest housing market reports are encouraging, with a reduction in the numbers of homes for sale to a level that represents a modest

Prices always rise after they fall...eventually.

buyer's market, rather than the wild buyer's market we have lived through over the last few years. About six months worth of inventory is considered balanced; anything more than that tilts the market in favor of those who have the wherewithal to make offers. In this market, sellers have not refused any reasonable offers (and have accepted some unreasonable ones). On Daniel Island, for example, one home sold recently for $725,000 after being purchased for $950,000 just two years ago, and that price was considered a bargain at the time.
I have been giving Brunswick Plantation credit for its aggressive moxie in its emails up until this latest blast. For example, its discovery package, priced at $10 per night, has been by far the lowest of any I have encountered, although I pity the poor couples that have had to sit still for the real estate presentation and tour. Brunswick isn't giving away overnight accommodations without a reasonable expectation of sales.
But this latest spate of emails from the community distorts reality when it indicates, "Economists are saying nationwide housing has hit bottom.

Even as the inventory of unsold homes decreases, prices won't likely rise until the unemployment figures turn around.

Historically, prices will begin to rise, so now is the time to buy." Easy for them to say; prices always rise at some point after they fall. The question is when, and although the respected Case/Shiller report today indicated a slight rise in prices in May, there is too much uncertainty over employment to start celebrating just yet. Potential buyers at Brunswick Plantation and other communities won't take the plunge until they sell their current homes, and they won't do that until they get what they think is fair value for those homes.
Even those economists who see inventories going down worry about unemployment and lingering foreclosures effects on home prices. For those with financial security, bargains will continue to be there, and the latest uptick in prices could very well be a false positive.

Brunswick Plantation should read economists' reports all the way to the end.

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Tuesday, 28 July 2009 15:30

Last Updated on Tuesday, 28 July 2009 16:06

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