Especially at this time of the year, you’ve undoubtedly been taking in predictions of the future of the housing market (and I’ll bet you missed the pun in the headline).
Since the forecasts vary widely and invariably are equivocal, any confusion is understandable, even if the economists themselves often are not.
Quoting CNN Money, Realtor magazine listed these prognostications among many more that are available:
- Fiserv Lending Solutions, a financial analytics firm, says that prices will decline an average of 11.3 percent in 342 of the 381 markets it covers.
- Moody’s Economy.com foresees another 8 percent drop, with Arizona, California, Florida, and Nevada feeling even more pain.
- Shari Olefson, author of Foreclosure Nation: Mortgaging the American Dream, predicts a national average decline in prices of about 10 percent in 2010.
- Peter Schiff, president of Euro Pacific Capital and the most bearish of the bears, says real estate prices could possibly fall another 30 percent before they hit bottom.
- And according to Chief Economist Lawrence Yun of the National Association of Realtors, home prices will rise more than 3 percent in 2010.
If what the soothsayers have to say is important you, have a look at my free biweekly e-newsletter, which also includes a range of information on the U.S. and New York markets, research, mortgage news and celebrity real estate activities, among other topics.
Making reliable predictions is next to impossible because, as the Wall Street Journal points out, there are five major variables: mortgage rates; Fannie, Freddie and the FHA; loan modifications; growth of loan resets; the tax credit and resulting home sales.
As far as it goes, that’s a nice list. But it leaves out the unemployment rate, the strength of the dollar and the robustness of the U.S. and global economies. Today’s Times puts the issue in a macro perspective that focuses on the unknowables.
So, don’t expect me to make any predictions that I won’t later deny. I will state this once again, however: If prices in Manhattan fall even another 5-10 percent, I’ll be surprised (as will a number of others, based on the latest quarterly reports, which I’ll distill in my forthcoming e-newsletter). And will my face be red!
Either way, here’s hoping, one and all, for a. . .
Happy New Year!
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022