Whatcom Home Stats: The Current Real Estate Cycle

The Current Real Estate Cycle

So this article is going to be a bit edgy and may provoke mind tingling thoughts of Inquisition.  Perhaps you may even get dizzy.  I did!

Where is the market going from here?  In my opinion...nowhere but down...like a home sick mole!


credit crunch


These days whether I'm talking to a mortgage broker, another agent, investors, etc. I ask "So where do you think the real estate market is heading.  Most think the worst is over, but very small few agree with my reasoning.  So, I decided to bring it to the Rain and hopefully make it out alive...hit me with your best shot.

With the over-all condition of the financial market, stock market, and real estate market I can't believe they're are so many optimist out there.     

 Here's my roller coaster of a explanation...

Cause:  Lenders tightening their lending standards to only type A borrowors.

Effect:  Large pool of buyers are wiped out!

Cause:  Less buyers shopping for real estate.

Effect:  More inventory on the market.

Cause:  The longer it takes to sell the market inventory.

Effect:  More seller competition = More buyer incentives = Price decreases

Cause:  More Price declines

Effect:  More defaults

Cause: People maxed out the Home Equity Line and are now living on credit until the next ball drops. 

Effect:  More defaults, More credit crunch, More inventory

Cause:  Reserves are low for lenders lending money.

Effect:  Money costs more to lend...Interest rates go up.

Cause: Interest rates go up

Effect:  People can't afford to buy a home

Cause:  Inflation

Effect:  Homeowners can't pay their bills, ie., mortgage and credit cards

Cause:  Homeowners can't pay their bills, ie., mortgage and credit cards

Effect:  More Defaults

Cause:  2 More cycles of Adjustable rate mortgages to reset over the next year.

Effect:  More Defaults....more inventory, more price declines.

We'll you get the idea...it's a vicious cycle.  I could go on and on...I didn't even touch the volatile stock market and it's effects.  Please give me your thoughts as I am open to your opinion and I do realize mine is a bit different from the average Joe.

If your a buyer make sure you buy with your market decrease buffer built in.  If you're a property seller make sure your property is priced right to sell fast or get creative. Creativity can be a win/win situation in this market. Let me show you how!

Specializing in Bellingham, Wa Bank Owned Properties, Short Sales, and Seller Financed Properties.  Please give me a call, I'd love to work with you!

Comment balloon 10 commentsTara Camp • August 26 2008 08:40PM


I totally agree. This is doing nothing but making the housing market worse. What are the idiots in Washington thinking? I can't understand why someone isn't trying to help instead of hurt! The programs for 100% shouldn't have been taken away completely, just given to buyers that had good credit. And don't get me started on the "new" credit scoring. Where the heck did that come from. That alone took many, many buyers out of the market completely. What a bunch of beuracratic dummies!

Posted by Toni M. Rose, Easley SC Real Estate (Prudential C. Dan Joyner Realtors) over 10 years ago


We are in a challenging market, but I believe that the market is in recovery and full of opportunity.

Good luck and success

Lou Ludwig

For additional information about Lou Ludwig go to www.LouLudwig.Com

Posted by Lou Ludwig, Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC (Ludwig & Associates) over 10 years ago

Tara you make several good points and personally I agree with what your saying.  As an investor I have stopped flipping properties unless they are high end homes. Right now I'm focusing on buying rental property.  People will still want to live in homes even if they can't buy them looks like its time to buy, hold and rent.  Low end flipping is dead.   Great post.

Posted by Justin Ukaoma, Kansas City Real Estate Investments (Vizion KC) over 10 years ago

Haha.  Very interesting.  I like it. A+

Posted by Robert Worthington (Worthington Realty) over 10 years ago

I have a migraine now (LOL)..

We have to see that these are trying times, but the Sun always comes out  after a bad rain storm... Eventually that is...

Money is a tricky thing, I think when we see gold balance or level back to about $600 then we will see that pot of Gold...
Make sure you buy your Lucky Charms....

Don't fret Uncle Sam always bails out those in need...

Posted by Laura Forty-Garcia, Your Central Florida Connection to Real Estate (RE/MAX CENTRAL REALTY - GRI, CDPE, SFR, CREO) over 10 years ago

Think positive, and speak positive. it will get better. Figure out how you can contribute to making things better. If everyone did this, we could turn this whole thing around.

Posted by C. Thompson, Loss Mitigation Cases (Loan Modification) over 10 years ago

Hi Tara;

Great post, you make several good points and I agree with what your saying. Good luck!!!!

Posted by Anthony Stokes-Pereira, Realtor (Better Homes and Gardens Rand Realty) over 10 years ago

You forgot to mention short sales and foreclosures entering the market which places further strain on values.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 10 years ago

Thanks for the comments!

Lou:  I'm a very positive person...and I'm being realistic.  Yes, there are lots of opportunities out there!

Justin:  Your business looks interesting...a bit different from your average rehaber.  I like it!  What you're doing is great!  Yes, buy and hold is here to stay for a while.

Laura:  Really you think gold is going to go down to $600.  I only see it rising from here.  Are you suggesting a fall and then a sky rocket?  In my opinion the dollar will lose so much value that our currency will have to once again be back by precious metals...gold and silver.  The dilution of "paper cash" into our financial market will continue to make gold more valuable, no?

Callie:  I appreciate your optimism, I do think positive and am trying to make things better... I specialize in Reo's, preforeclosures, and seller financed properties.  I have created a niche that is reducing my local inventories so that the market is less saturated than it would be otherwise.  I have creative solutions that will help buyers and sellers close a deal without the help of a bank.  Because the banks aren't helping.  Banks should bring back the assumable loan as it would help to alleviate some of the pain.  For Reo's I market these homes and bring buyers with all cash that can close quickly, but yet banks aren't willing to cut the price in order to get it sold...most of the time.  I am optimistic that one day soon, the banks will get wise and cut their losses before they go under.

Bill:  Thanks!  Not sure how I missed that, when I started I tried to write the article in paragraghs, then I became overwhelmed by all the issues of our current market...it slipped through the crack.

Posted by Tara Camp (Keller Williams Western Realty) over 10 years ago

This is one of those things where people could say "look on the bright side" and they'd be right... there are positives ... but many of them have to do with down-cycle investing. I like that you're demonstrating the issues that face those who are attempting to buy or sell (or speculate) on market coditions. The clear-headed consumers and investors will notice that the doom and gloom that they see does have a few silverlinings- thought they're a bit harder to spot in the age of numbers that have entered very odd territories.

Posted by Chuck Willman UtahHomes.me, Utah Homes (Utah Homes) over 10 years ago