if you buy to live in, it can make sense. Generally, I don't think housing is cheap. If you consider the bubble started in 1998, and you look at what prices sold at before then in desirable areas, even in hard hit areas prices are still above inflation, they haven't even overshot to the downside yet.
I am talking about desirable houses in good locations. You can find 3/2/2 (3bed, 3 bath, 2 car garage) and get maybe 8-10% after all expenses if you rent them out, but I don't think it worth it and I agree prices will have to go much lower.
AND that would be sub $250k houses, anything above that is generally overpriced except for destroyed/rehab houses but there is a reason for that.
The point being, housing to live in desirable areas/good house is still MORE expensive inflation adjusted then it was prior to 1998 (when the bubble started). Hard to believe, but even hard hit markets, its true.
People will discuss low interest rates but thats also largely a function of expected inflation. Prices could correct by going sideways for a long time (and not keeping up with inflation) until they become cheap, but the most likely outcome is constantly dropping at 1-3% a year for many years (overall) which could also be short bursts of upside followed by years of decline.
Basically, I'm staying away for real estate. There are deals to be had in 2009 but even then I can't say we're anywhere near a bottom on DESIRABLE areas, yeah you can find blasted areas where you can get a return but its just not exciting. Its not the type of buy where you can't help but buy it, you're salivating. Thats how it SHOULD be in a cratered market.
