Realtytimes.com is predicting a good winter for the housing market in general. The reasons? Falling inventories and falling interest rates. The national average of housing supply is 9.6 months, down from 10.1 months in November. Generally speaking, a six months supply of houses is considered a “balanced” market, so 9.6 months still means it’s a buyer’s market. But, the direction is more important at this point – if interest rates continue to fall or at least stay as low as they are right now and inventory continues to fall, eventually housing prices in general will start to level off. While it may seem like a complete disaster in some pockets of the country, the average price of houses only fell about 2% last year from 2006 – hardly a “crash”.
Of course, all of this talk about “housing” in the general sense is meaningless to the shrewd investor, who looks at local housing conditions within his market, and invests in particular deals instead of markets.
