Jill Schlesinger, executive vice president of StrategicPoint Investment Advisors, says the steep, and continuing drops in home prices are "astounding because, when you think about what happened between 2000 and 2006, prices doubled. So, we're seeing a retreat back to more normal levels."
So is now a good time to buy?
On The Early Show Wednesday, Schlesinger told co-anchor Harry Smith, "It depends on where are you in the country, obviously, whether you really want to jump into the market."
Smith pointed out that, when prospective buyers see the little bit of an up-tick, especially in this collapsed market, they begin thinking they have to move quickly. Should they?
"(The market) could go lower," Schlesinger says, "but there's an interesting crossroads right now. Mortgage rates are so low right now, (at) multi-decade lows, and home prices are coming down. So, you can get a 30 year mortgage for around five percent, and prices are coming down.
"I think this is the year that you really start to look.
"If you're a motivated buyer, don't be in a rush, be patient, and remember what my mother always said. She's a realtor. She said, 'A house is like a man there's more than one for you in the world!' "
Schlesinger noted that, "The places where we saw the biggest (price) increases are now, obviously, seeing the biggest decreases -- Phoenix and in Florida and parts of California. Boston and New York, not as much. So, if you're a buyer in some of these markets, there are tremendous bargains to be found. You've got to be careful, you've got to look around. But if you've got a job -- very important -- and you've got some money and you can afford -- you look at mortgage payments and say, 'Hey, if I make as a couple $100,000 a year, can I keep my mortgage, my interest, my homeowners, can I keep that to 28 percent of my pretax income?"
"That whole old paradigm that we always talked about, a quarter-to-a-third, never go over the third," Smith interjected.
"Never," Schlesinger agreed. "And you will stay out of trouble if you really stick to those old, really important rules."
When it comes time to buy, decide where you want to be, and do your homework, Schlesinger suggests. Present yourself as a motivated buyer. Get pre-qualified for a mortgage.
What should you bid? "Be happy to lowball," Schlesinger says. "There's no offer that's too low in this market. ... See if there's a nibble. Why not? Be patient. There's no reason to rush. You're gonna have this whole year of continued price declines."