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Our guest blogger this week is Barbara Friedberg. She's editor of Barbara Friedberg Personal Finance. I check it out all the time. She's selling her home.

Barbara Friedberg: Mortgage rates have fallen to absolute rock bottom levels and as a contrarian investor, I must chime in. And, I've got more than a bit of background in the area. My family was in the real estate business for many years, the spouse and I are selling our fifth home, and purchasing a new one across the country. (And I even sold real estate for a few years in my twenties). Finally, I lived through the real estate market of the 1980's with double digit inflation and sky high interest rates.

HERE ARE THE FACTS

  • We had a real estate bubble where home prices soared, and folks borrowed a bundle to buy their McMansions. Many of these folks did not have enough income to justify their mortgages.
  • The economy hit the skids and lots of people lost their jobs!
  • Then these poor folks saw their adjustable mortgage interest rates increase.
  • Thousands of people lost their homes to foreclosure or are forced to sell for less than their mortgage amount.

After speaking with my realtor previously, here's the picture in our small town. Apparently this is the worst market in decades, with 3 pending sales in his office of fifty realtors when 15 to 20 are the norm at this time of year. He sounded more than a bit desperate! And this is the scenario across the country.

Having a desperate realtor is not what I bargained for!

IS THERE A SILVER LINING?

Being one to look on the bright side, I thought, well at least we're not the only ones suffering with less than optimal showings of our home. After all, we still have a few months before our trek across the country to a new job! That should be more than enough time to get our abode sold.

One benefit of being in the post 40 crowd is that I have seen a few economic cycles. Although I can't predict the future, I'm certain that at some point the housing market will rebound. I remember that even during the 1980's with the double digit interest rates, some homes sold.

In fact, one of the basic economic tenets is this; the economy is cyclical.

WHAT TO DO?

To sum it up, if you need to move now, you have a bit of an advantage. Interest rates are really low. Home prices have fallen and may be declining even more. So, you may need to take a bit less than you hoped when you sell, but there's a strong chance you'll make it up when you buy.

And even if you don't have to move now, with rock bottom mortgage rates, it's not a bad time to lock in some long term mortgage debt. Remember, there is never the "perfect time" for transition.

What's going on with the real estate market today?.... Low interest rates, falling prices, slower sales. Like any scenario, this one has its pros and cons. If you are in a position to buy a home, you may never find better mortgage rates in your lifetime.

Follow Chris Farrell at @cfarrellecon