Don't Forget Chicago, Mr, Stein!

Ben Stein How Not to Ruin Your Life

The High and the Low

First, as I see it (and I'm often mistaken), the real estate market still has some serious falling to do. I base this on the fact that real estate in some of the most overpriced markets -- like Manhattan and the west side of Los Angeles -- have yet to fall dramatically.

I, your humble servant, have been looking for a condo here in L.A. for my son, and I've been floored by how high the asking prices are for these dwellings. Yes, they've fallen, but they're still far higher than they were four or even five years ago.

Keeping asking prices high may make sellers feel good, but it won't sell their homes. Consider this: On one hand, brokers tell me that prices haven't fallen much, and that they think that's a good sign. On the other hand, they complain that sales volume is way down.

Both Sides Now

Well, friends, the former has a lot to do with the latter. Volume isn't going to pick up until prices fall to accommodate the fact that we're in the midst of a real estate collapse. And buyers aren't going to step up to the plate in large numbers until it's clear that prices have fallen to reflect the new realities of the real estate market.

This means that if you're a seller, don't count on selling unless you have a price that makes sense in early 2008. Prices that made sense in early 2006 just aren't going to fly.

If you're a buyer, my advice is to still try to buy the house of your dreams, because they come along so rarely. But try to drive the hardest bargain you can; sellers should be very flexible. I would even say that if a seller isn't flexible, wait for a better mood to strike him or her.

Again, the real estate collapse has a long way to run yet, and it'll end when sellers get realistic. That could take four years, and maybe longer. But if you need to sell, there's no shame in asking a sensible price.

Very sensible article. However, LA and NY are not the only expensive cities in the country.