Got the question again today, "Have we hit bottom yet?" Well, to be honest the answer is Yes And No. As the National Association of Realtors has worked hard to explain, all real estate is local. And then there's local within a given area.
Here's a Pensacola Beach, FL, example. In 2005 I sold a Gulf front condo in a particular building for $700,000. A few days later another agent in my office sold the same floorplan for $715,000. These are great units with stellar rental history and as I said . . . Gulf front, but this was top of the market. Zip forward to late '07 and early '08. We had four of these units come on the market for between $375,000 and $425,000. Guess what . . . the smart money jumped in and they all sold quickly (Can you spell CASH FLOW?). It appears that all those that needed to sell did so as there is now only one active listing of this same floorplan and it is priced at $565,000. So, as far as this building goes . . . We've hit bottom.
And then I can give you an example of another condo project on the same beach where we haven't hit bottom. This building isn't Gulf front, but it's only a few hundred yards away from the Gulf and it is truly amenity packed. But the fundamentals are different. It's newer, farther from the retail core and doesn't have the repeat rental business yet. It also doesn't rent as well because it isn't Gulf front. Because there are so many amenities there are "amenity fees" associated with the rentals and renters tend to balk at this if there is an alternative. This project was sold when the pre-construction rush was in full force so there were a lot of "speculator" sales. So, as far as this building goes . . . We haven't hit bottom yet. 
Bottom line (So to speak!) - just as with stocks - you need good professional help if you are looking at timing the real estate market.
One thing is for sure, as with stocks there is a cycle to real estate and many factors impacting that cycle. The smart money doesn't always get the bottom, but it usually gets pretty close.
So the next time you get the question, "Hit bottom yet?" The answer really needs to be . . . you bet . . . let me give you the specifics!
Hi Robin,
Great post! You hit the nail right on the head. We have seen a pick-up in 1031 exchange business that started toward the end of February. We think the bottom of the market in terms of volume or activity was January/February. We do not think that we have seen the bottom of the market in terms of price. Buyers are beginning to realize there are opportunities out there and sellers are beginning to come back to reality.
Joe - Thank you!
Bill - Well, as far as the price bottom - if we are looking at particular neighborhoods or particular buildings - in my market some are back on the upswing. As my example shows, there are still some that are trending down. Every market is different and then there are the sub markets (like individual condos).
David - Wow! Your response should be a post! Your observation about the artificially high values is spot on. Several of my closings this year have seen the seller bring money to the closing table to pay off their equity lines.
Things are showing signs of recovery here in Central Texas as well, Robin. Frankly we have a lot to be thankful for if indeed we are starting to come out of the RE downswing! Thanks for a great post! Steve
David - I plan to follow your blog. Anyone who writes as eloquently as you do (and from an obvious base of knowledge) is definitely worth reading, and reading again!
Peter - Isn't that the truth!
Steve - I try to follow your market in Texas, which seems to have fared much better than the states to your east! Much of that attributable, I believe, to being spared the aftermath of Ivan, Denis and Katrina that the other Gulf states have had to deal with. I sold about 30 condos in a Galveston project, Palisade Palms, that is just closing now.
I think you are right real estate if very local and even beyond the city, I think it can even be as narrow as a neighborhood. There are some neighborhoods that may never look back.