Is this Bottom?

Contrarian investors know to jump in when everyone else is fleeing. Right now the news couldn't be bleaker, but could this be the bottom of the real estate slump? I am awaiting Congress' vote for the $700 million bailout with the rest of you. Another big bank was scooped up at a bargain basement price last night. Looks like a lot of Fall cleaning going on in the financial markets. If Congress approves this bill, pressure on the economy should ease and money should start flowing again. That should jump start this housing market.

Looking at housing in my town of Hamden, Connecticut, I see that our inventory has dropped recently. We have 317 single family homes for sales in a town of nearly 60,000 people. Two thirds of the inventory is priced under $300,000. People are not fighting this market. If they tried to sell and couldn't, they took their houses off the market. Of course, those that have to sell are in a different predicament. They have to negotiate hard with buyers, who are looking, and finding, bargains. Despite this situation, the spread between listing and sales prices is less than 10%, on average. We all know, if a contract favors one party too much, it generally falls apart. A good contract is a win-win situation.

So we wait. I predict this log jam will break soon. There are buyers and smart investors out there, who will see this as an opportunity that rarely comes along. Prices and interest rates may fall a bit further, but this is prime time to make a move. Economic activity is on hold right now, but not for long.