OK - granted I'm no real estate expert, but what's going on in the current real estate market ... in Perth? in Australia?
In 2006 we witnessed a generational run up in property prices (46% growth across Perth metro), and a tightening of the market with record low numbers of properties available for sale. Anything that listed for sale sold in hours, agents has weekends off with nothing to 'open' and up, up, up went the prices. People said it couldn't last... and they were right (eventually), but prices went up another 16% in 2007.
In 2008, it all got rather nasty (I suppose it had to - the higher the rise, the harder the fall?). The property market - certainly in the higher end of Perth - went dead. In some suburbs hardly a whisper of a sale went by, month after excruciating month. The world endured an unprecedented global financial crisis ("GFC"), which sorely affected those economies with relatively large financial sectors (UK, Iceland, USA); but in some ways, Australia - although experiencing a slower time of it - was isolated from the real nasties.
While this was going on (most of 2008 and early 2009), sellers either took their properties off the market or dropped their prices; and new sellers came in with more realistically-priced homes. Everyone started to realise that 2006 was over, it was a different market altogether.
As the world started to realise that maybe the worst of the GFC was over (all it took was enough people to think the worst was behind us and this feeling to spread), so confidence started returning to the market (sometime after March 2009) and with prices having adjusted downwards 20% or so, sales reappeared. Real estate agents pretty much sold all their remaining stock of properties during the 3 months of August - October 2009. The total number of listings fell and the market tightened again.
Which brings us to today, with (the 'other news' apart from ETS and the Libs) the Federal Reserve just having risen interest rates for the 3rd consecutive month (which is unprecedented by the way, the 2nd time I've used that word in this blog post... another record). Are we heading for another trip? A double dip recession? Did we get overly exuberant about the recovery? Do we need dampening down? Or are we going to learn from history and slowly rise out of the current market situation? Or are we OK?
What is happening? ...