Patience is a virtue (but the kitchen is lovely)

There's one of those little add-on "FORECLOSURE" signs hanging from just below the much bigger "FOR SALE" sign in the front yard of the house right behind us. The neighbors say it's always been one of the nicer properties on the street and that we should have a look.

Maybe we will have a look, but we certainly won't be buying.

About a month ago, only eight months into a one-year lease, we asked for and received a one-year extension, at least in part, to nip that sort of thinking in the bud. It's still way too early to start thinking seriously about buying real estate and John Wasik seems to agree in today's column at Bloomberg.

With no bottom in sight for the U.S. housing market, buyers are in game-show mode.

There are plenty of deals out there, yet you have to make some decisions if you are buying a new home. Choices flash in front of you as if a host is badgering you to decide your next move. Do you wait for prices to fall further? Or do you buy now and take the builder's incentives or their financing?

Whatever strategy you adopt, you will need to ignore some of the bells and whistles being offered and focus on price. You don't want to be caught buying a home today that may be marked down $50,000 next month.

With more than 4 million unsold homes on the market, the buyer with good credit and cash for a down payment can do well.
...
Playing the waiting game? If you delay your purchase, you may be rewarded. Home prices are forecast to fall 12 percent this year, according to Richard Syron, chief executive officer of Freddie Mac, the second-largest provider of money for U.S. home loans. Housing starts may plunge 22 percent in 2008 and remain at their lowest level in 16 years, he said in a speech to the homebuilders association on Feb. 13.

What else do you need to know? Whether you are looking in Florida, Southern California, Las Vegas, Phoenix or Ohio, one variable continues to taint several areas. Until the government can stem the number of foreclosed properties due to come on the market -- an estimated 2 million -- it's a good time to hold off.

Prices are going to fall a lot more than Freddie Mac's forecast 12 percent in the most overpriced areas, which may experience 50 percent declines or more.

Patience is a virtue in this market. It will also net you a better deal if you can turn off your game-show impulses.

Yeah, this is probably going to be the summer of capitulation for sellers.

Despite the best efforts of government aid programs for those who are about to lose their home because they can't afford the payments, Mr. Market will likely be doing the heavy lifting this year in restoring order to a real estate market where prices had become ridiculously high in many parts of the country.