What is a Double Dip Housing Market

A double dip housing market is a bad sign of times to come.  A brief answer to the question of what is a double dip housing market is as follows:

A double dip housing market is one where a long decline is followed by a flattening of loses.  Once these loses flatten things seem to improve and there is actually a short period of growth.  This flattening and growth are mirages, though, because a short time after this happens the housing market begins another descent.

♦  Are we in a double dip market now?

That is tough to say.  Ultimately it is up to each person to decide the answer to that question on their own.  There has been a period that things looked like they were getting better to only drop again.  The question is whether the “flat” and “rise” periods were really long enough to be considered for a “double dip”  or if they were just optimism from many people and really it has been a steady decline. 

♦  What can be done with the housing market and the double dip.

The biggest thing is not to panic.  That is easy to say if, of course, for someone not in danger of losing their home.  But in times of great trouble come great opportunity.  When it does flatten out every investor must analyze data and make a decision, is this a flattening before and inevitable rise in prices or is it just the “calm” before another calamitous drop.  Getting that answer correct can be the difference between making a ton of money or losing a ton of money. 

The main important take away is that a period of stability followed by a short increase in prices does not necessarily mean recovery has begun.  A good investor has to have other sources of data and analysis to let them know if it is a good time to buy.

♦  It can take some faith

For a person who has been riding the housing crash all the way down the “investment” opportunities are meaningless.  Their future and family security may be at risk.  The thought of struggling to make it, finally seeing a “ray of hope” and only to have a double dip and another crash in prices is enough to frustrate any man or woman.

It I enough to say, “To Hell with It” and just walk away from the lose.  This is of course an option, with both short sales and foreclosures.  Sometimes you have to have faith though.  History has shown us that “long” term housing prices will always rise.  As more and more people compete for less and less space, the “relative” value of any property has only one place to go, and that is up. 

♦  The legacy of the double dip.

Hopefully soon the prices will flatten out and rise.  Really rise this time, not just an teasing, “double dip” rise.  Ultimately it almost has to, but hopefully it does before more good people succumb and lose their homes to the crashing housing market.