Housing Market Bottoming Out?

February 18, 2009

real estate, the economy

We can only wish. Then we’d have nowhere to go but up.

According to Bloomberg, this may be the year the housing market bottoms out. Hmm. I am skeptical; we’ll see. I haven’t seen any moves by anyone to tighten the belt or hit a diet supplements routine. Instead, I still see an awful lot of gorging!

U.S. home prices will reach bottom by the end of the year, concluding a slide that will have cut values 36 percent, Moody’s Economy.com said today.

“Notwithstanding the intensifying economic gloom, the bottom of the housing downturn is within sight,” chief economist Mark Zandi said in a statement today. “Presuming we see strong action by policymakers to help support the economy and the housing market, prices will begin to recover by the end of this year.”

Demand for new and existing homes began to fall in 2005, marking the end of a five-year U.S. housing boom fueled in part by easy credit for subprime borrowers. Existing home prices tumbled from an average high of $230,200 in July 2006 to $175,400 in December, according to data from the Chicago-based National Association of Realtors.

U.S. home prices will fall another 11 percent on average before stabilizing, according to Moody’s Economy.com. The Case- Shiller home price index will fall 36 percent from its 2006 peak to the bottom this year, Zandi’s study said.

About 62 percent of U.S. metropolitan areas surveyed will record double-digit declines in home prices by the end of the slump, according to today’s report. Prices will fall more than 50 percent in former boom areas such as southeast Florida and parts of California, including Riverside.

The rest of the nation is experiencing what we in New York State have been seeing for the past 15-20 years. So here, the housing market decline is not as unbearable… to every cloud there’s a silver lining, I guess… *laughs manically*.

You know, when the American people were clamoring to the government, demanding that the government “create jobs,” I think Americans forgot to tell the leaders– “Uh, we meant create more jobs for AMERICANS.” Because that’s a lot of the problem, here– the outsourcing of everything, everything except retail industry jobs. You just cannot base an economy on “Paper or plastic?” and “Do you want fries with that?” DUH!!!

Anyway, it’s really up to us to make this economy work. Shopping our way out a recession is not going to work– getting out of debt, building savings, and living frugally is what will do it.

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3 Responses to “Housing Market Bottoming Out?”

  1. Sinclair Says:

    Part of the problem is that we are set up to only prosper as a country when people are spending. Since we create nothing here to sell to other countries, we have nothing to keep our economy moving except food/fast food, and consumer goods FROM OTHER COUNTRIES to be purchased by Americans. Sadly, I do not see the bottom in sight by any means…

  2. bstone Says:

    so when are the banks going to let people start buying homes again – isn’t that a lot of the problem. that’s what i hear on the news, but wonder what’s really happening in everyone’s situation

  3. Maureen Says:

    I disagree with you….I don’t see the housing market bottoming this year, next year or even in 2011. You are neglecting to take into account low consumer confidence, job uncertainty, and most importantly the slew of houses that are in the pipeline for foreclosure and the glut of Alt-A and Adjustable ARM mortgages that are just beginning to reset and will peak in 2010 through 2011. This next wave of foreclosures is predicted to be much worse than the sub-prime debacle, and these are prime loans that are going to be going into default which will have a much worse impact on our economy. If there are any improvements seen at the end of this year, they will be short-lived. Now is not the time to purchase unless you want to be extremely upside down in your home.