Subprime - How Long Before the Real Estate Market Normailizes

[Hamlet]

Here in Minneapolis (I live in the Plymouth suburb), the market doesn't seem awful. Houses are selling slowly, but they are selling. Prices are off their highs, but not falling off a cliff. They are comparable to 2005 prices.

I would guess that next summer will be the bottom assuming:

1. The economy holds up
2. Interest rates stay low

Those two things are pretty iffy, though. If the Fed has to get serious about fighting this latest batch of inflation, interest rates may spike dramatically. I don't expect houses to sell very well if rates get to 9-10%.

 

[prubin]

I am still waiting for the housing crash in the Bay Area.

I assume you are referring to the San Francisco, not Tampa, bay area. I think examining the bay area as a single real estate market is too broad of a generalization. I live in San Francisco, where we have seen almost zero foreclosures, houses are selling, albeit slower and with fewer offers. Contrast that with eastern Contra Costa County which if it hasn't crashed is in free fall.