As with all other cycles, this real estate cycle of excesses will end. So says – in paraphrase – David Crowe, chief economist of the National Association of Home Builders. The Los Angeles Times reported that it may seem odd to talk of shortages in this era of foreclosures and excess inventory, but the cycle will change someday and when the market returns to “normal” we may see more homebuyers and not enough homes. As a result, the multi-family category will be hit hardest, in other words, apartments may get harder to find. Also, since so many homeowners have had foreclosures or other credit/financing problems today, mortgages might get harder to acquire as well. He suggested that apartment builders need to “start now” if they want to be ready when the shortfall comes.

What interests me while watching this entire market go up and down and all around as it has lately is how what we call balance and “a good real estate market” always lasts such a short while. What exactly is a good real estate market? A seller’s market? A buyer’s market? I tend to believe it’s when most home buyers with good credit or decent credit qualify for a home purchase that they can afford and inventory in most areas is not more than 3 – 6 months. Such a balance though is going to be hard to find today with the foreclosures and short sales and also because as sellers and buyers we’ve gotten spoiled by easy credit and quick sales. Today the pendulum has swung to the other extreme where borrowers with good credit are still having a hard time closing escrows they worked so hard to put together.

We’re just going to have to wait and see where this market goes. As a real estate teacher once said, it may be a buyer’s market or a seller’s market but it’s almost always an interesting real estate market. Not a dull moment.

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