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Here’s some responses to readers’ comments:

Reader Billy Bob Henry said:

There is no uncertainty in this market-IT IS IN THE TOILET AND WILL BE THERE FOR 3-5 YEARS! Anthony, since you have been a real estate salesperson for just 6 years, which is a little shorther than this bullmarket, you have yet to experience a severe downturn. Will get ready buddy, because it is here. I have even money that you will not survive for 2 more years, but if you do, and can make it thru this downturn then you can call yourself a seasoned vet of real estate. But, until that hapens, you are just riding outthe end of a huge bull market, and what goes up must come down.

First of all, thanks for your response.  Actually, the real estate market, in downtown, has been in the toilet for over 2 1/2 years already.  I see condos that sold for $750,000 two years ago resell at $575,000. As for experiencing a severe downturn, you don’t have to be a real estate agent to do so.  I’ve owned property over the last 35 years and have seen the market turn during 1980 to 1985 as well as 1991 to 1996.  I’ve done my share of bleeding.

As for betting me on surviving for 2 more years, I don’t want to take your money.  However, I expect more than 50 percent of the licensed agents to be doing something else very soon.  It’s the 80-20 rule.  20 percent of the agents do 80 percent of the business.

Reader Soupy Norman said:

So, to summarize, you’re saying that we should ignore fundamentals like record supply, median wages, rents, etc. Your evidence is that buying at the bottom is profitable. Your assumption is that even after prices have nearly tripled a 10% correction means we’re at the bottom again. I am not anti home ownership. I’m just going to wait until the elephant in the room (inventory) drops from record highs. The Case Shiller futures market is putting the bottom near the end of 2009 so I’m not sure what you know that thousands of investors with money on the line don’t. If I seem bitter it’s only because realtors took on the role of financial advisor and now I have family and friends in serious trouble due to questionable economic forecasting by unqualified individuals.

Soup,

As I mentioned in my post, I’m just concerned about my area when it comes to numbers.  And, as someone who lives and breathes the downtown and Little Italy districts on a daily basis, I can see trends that start before the analyst’s pick them up three months later.   Right now, I see prices stabilizing in the $250,000 to $500,000 categories.  Product from $700,000 to $1.2 million still has a way to drop.  The more expensive condos, $1.5 million and up, are still selling.

To respond to your comment about bad advice, I understand.  In my case, just over two years ago I discouraged some of my investor clients from putting deposits down on the very buildings that are coming on line this year.  As an older, wiser, person I had seen “irrational exuberance” in the real estate market before, and warned them of that.  Today, they are very thankful. 

I have read where we have had a 10 percent correction so far.  If that were true, than I would agree with you and say we have another 3 to 5 years.  However, I have seen, in my market area, a 25 to 30 percent correction already. The peak of the downtown market was almost three years ago.  That’s why I believe that we are closer to a bottom than most people think.  In some categories, like the low end, we may already be there.  That being said, I wouldn’t recommend buying right now in the suburbs.  I think there is still a way to go before that type of product hits bottom.

Thanks for your comments.

Reader Petra said:

Okay Anthony..I’m sold. Can you show me some condos in downtown? Nice try!

Only if you were looking to live in it for at least 6-7 years.

— ANTHONY NAPOLI

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