Its official: The housing market has reached a new low. According to the widely watched Case Shiller Home Price Index, home prices are now at the lowest point since the slump began some five years ago. Weighed down by foreclosures, sluggish hiring and a tight lending environment, the US housing market, we are told, is in dire straights once again.

Interestingly, however, this now-popular narrative contradicts what many home buyers are experiencing in the trenches. If housing is faring so poorly, why then are so many homes selling above asking? Why did the property our company just listed in Salinas, a town where the economy is anything but strong, get 16 offers in the first week of being on the market? Why is the phone ringing off the hook with buyers stumbling over themselves to buy a $2 million property … with cash?

The answer to these apparent curiosities within the marketplace is not easy to find. Look at the market as a glass half full and it seems like a great time to buy a home. Prices are down, mortgages rates are low (really low!) and don’t they always say to buy when there’s blood in the streets?

But take the more pessimistic view and renting seems like the only prudent way to live. The broader economic outlook is shaky, at best, with high commodity prices, mini sovereign debt crises popping up every week and geopolitical tensions that seem poised for some dramatic crescendo, as if what we’ve witnessed this spring in the Middle East and North Africa have simply been a warm-up.

Confusion is king and likely to reign for the foreseeable future.

Our advice to buyers, in particular those with time on their side, is to be patient, be picky, but don’t be stubborn. We believe the worst of the price declines are behind us, not in front of us. In the Bay Area, our diversified economy and wealth of innovation has helped insulate our job market, and by extension our housing market. There has been pain, to be sure, but we have a lot more fundamentally going for us than many parts of the country. Opportunities are presenting themselves, and every once in a while a house comes on the market where paying list is, actually, a good idea.

But risks remain, both on a micro and macro level. It most certainly is not a time to be overpaying, no matter how perfect a house may be. Emotions, they say, are the enemy of good traders. So too should emotions be considered an enemy of the savvy home buyer. Consider the economics, both near and long term, of any housing-related decision you undertake.

And, as always, if you don’t know how to take the next step, or what the next step even is, give us a ring and we’ll set you down the right track.

This entry was posted on Wednesday, June 1st, 2011 at 3:56 pm and is filed under Cirios Trends. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.