When it comes to predicting the direction of the housing market, there is no shortage of opinions. Below you’ll find excerpts from “The Soothsayers” section of my forthcoming e-newsletter, Realty Digest, which I write every two weeks. My next newsletter will be issued around noon on Friday, Nov. 4.
Take your pick from the excerpts, draw your own conclusions and forward your comments to this blog:
- Housing starts will increase by 36 percent next year and the housing sector will contribute to economic growth for the first time since 2005, according to the November survey by the National Association of Business Economics.
- First American CoreLogic predicts continued declines in most markets, albeit at a slowing rate, for the next six months, followed by a rebound in the spring.
- Harvard economist Edward Glaeser doesn’t foresee property values rising to previous levels even in attractive locales. “The harsh reality is that real estate prices that go up come down. I’ve found that for every real $1 increase in local market prices over a five-year period, prices go down 32¢ over the following five years,” Glaeser says. Continue reading
“Although there are some signs of improvement or at least steadiness in new construction and sales, housing starts stand near 60-plus year lows, and any life in home sales is coming from distressed foreclosure sales, temporary first-time buyer tax credits and low interest rates that moved higher in recent weeks.” notes Center Director Nicolas P. Retsinas. Adds Executive Director Eric S. Belsky: “The best that can be said of the market is that house price corrections and steep cuts in housing production are creating the conditions that will lead to an eventual recovery. For now, markets remain under considerable stress.”
Meanwhile, the number and share of households spending more than half their incomes on housing continues to remain at elevated levels. Continue reading