Now is an OK time to buy a house to live in for the long term, but as an investment, we still have a while to go. Here is why, especially the last two reasons.
1. Mortgage rates have increased during the last few weeks by almost one percent for 30 year fixed mortgages.
2. Nonfarm payroll employment fell by 345,000 in May.
3. The number of unemployed persons increased by 787,000 to 14.5 million in May.
4. The unemployment rate continues to rise, increasing from 8.9 to 9.4 percent.
5. Real gross domestic product decreased at an annual rate of 5.7 percent in the first quarter of 2009.
6. Many amateur / first time real estate investors are jumping in to the market. Last time I saw that was at the top of the market in 2005.
7. In California and Nevada, I've seen a significant number of houses receiving many multiple bids over the asking price. Last time I saw that, again, was at the top of the market in 2005. Maybe things are different this time, and it now means that real estate is bottoming, but I doubt it.
However, I think we are still close to a bottom and I still stand by my prediction I made in September of last year, that the bottom of the real estate market will be November 25, 2009.