Chase the market down

XXX Sylvan Way $139/sqft. Asking $359,000.

Sellers: don't miss out on the fantastic interest rates before the Fed stops its $1.3 Trillion MBS purchase program. CalculatedRisk says the program is 85% complete and is on track to finish by April 2010 as scheduled. At that point, expect mortgage interest rates to jump 0.35 to 0.5% over night. (The Fed seems to think rates will jump by 1% overnight, but I trust CR's analysis more). Higher interest rates mean buyers will be bidding less. That's less money for you.

Remember: you're holding on to a depreciating asset at a time when the government is bending over backwards to make sure you'll receive as much as possible for that asset.

My tax dollars are going into your pocket. Rob me while you still have the chance.

...or chase the market all the way to the bottom.

Today's property was listed on December 16th for $385K. I mean, it was listed December 16th, 2008. In the past year, the owners lowered their asking price to $380K, then to $368K. They took their house off the market for a short period and then relisted in September (giving it that "fresh" look) for $365K. Each time they lowered their price only enough to make sure it didn't sell.

Imagine if in December they had priced it for $370 instead of $385. They would be done with the arduous task of selling a house, and they would have gotten more for it than they will now. They are chasing the market downward with delusions that their house is worth more than what the market will bear.

April's going to be an interesting month. The home buyer's tax credit will end AND the Fed's MBS purchase program will end. There will be a rush of volume in April. May, not so much.

If you haven't sold by April, god help you.