Except for those folks who must move, there aren’t many buyers. Even the tire kickers are staying away in droves. Says Lew Sichelman, San Francisco Chronicle, Octover 7, 2007. The reason, of course, is that people are afraid to pull the trigger at a time when prices are dropping. Who wants to pay $250,000 for a house today when it might be worth, say, $240,000 next week? Or $230,000 the week after that?
Every economist has his favorite indicators. For Lawrence Yun, senior economist at the National Association of Realtors, it’s jobs and rents. Job growth creates pent-up demand, and demand equals sales, Yun says. And when apartment rents are rising, tenants are likely to become fed up and start looking to buy.
For Markstein, a key indicator is the incentives builders are throwing at potential buyers. Once the giveaways start to dry up, he says, it’s a sure sign the market is beginning to turn.
Robert Campbell, publisher of the Campbell Real Estate Timing Letter, has five sure-fire indicators on his list. He says the signals are totally accurate for the San Diego real estate market, where he is based and has tested his theories for 24 years. His indicators have been equally accurate in all of Southern California and much of the rest of the state, he says, and “should work” in just about any locale.
Here are Campbell’s five vital signs: Existing home sales, Building permits, Mortgage defaults, Foreclosure sales & Mortgage rates.
Source: SF Gate