Have We Hit Bottom?

Yesterday, the Orange County Register had an article entitled ‘O.C. Homebuying Slump Ends After 33 Months’. I love that title and I hope that it’s true. I have some concerns:

The coming election will likely slow buying activity. Based on past real estate years it’s likely to be a bit slow with buyers taking a ‘wait and see’ approach. We also are moving into the seasonally slow period of the market.
Consumer confidence is still a big issue.
With prices having gone down for so many months in a row, there is little urgency to buy right now. In past years, buyers felt a rush to buy before prices climbed higher. Now, the opposite is true.
With foreclosures still coming onto the market, there is still inventory that must be absorbed before a recovery can begin.
Economic uncertainties that can directly or indirectly impact buyers’ ability to buy or secure financing.
Limited financing options and stringent qualifying requirements limit the buyer pool.

That being said, there are things that seem promising:

I don’t see prices making a dramatic drop from here. In the last year the median sales price for an Orange County home has fallen 28% in a year. There may not be much more room to fall.
Investors and buyers that have been waiting for the right time to enter the market are beginning to jump off the fence. The recent buying spurt of activity shows that the demand is there when the price is right.
Interest rates have stayed relatively low and those interested in taking advantage of those rates are making the leap.

Time will tell. Stay tuned.