Daily Real Estate News | August 26, 2008Is the Worst Over? Analysts Have Mixed Views
Some analysts reacting to the news that home sales rose a healthy 3.1 percent in July compared to June say the increase predicts further improvement. Others are more pessimistic.
"We are not yet ready to call the current levels a bottom but clearly most of the declines are behind us," says Adam York, a Wachovia Corp. economist.
"The good news is the trough is behind us," says Harm Bandholz, a New York-based economist with UniCredit, but Bandholz warns that tighter lending standards and rising foreclosures will continue to put pressure on housing prices.
Real estate consultant John Burns, who advises large builders and investment firms, says he thinks supply and demand will remain out of whack until there is a 46 percent decline in the inventory of homes on the resale market.
Burns, who is president of John Burns Real Estate Consulting, estimates that by 2010 the most stable markets will reach equilibrium and by 2011, the national market will move into better balance. Overall, he believes that it will take until 2014 for it to be business as usual.
Sources: The Wall Street Journal, Kelly Evans (08/26/2008) and Business Week, Amy Feldman (08/18/2008)
I guess we are in for the long haul. Good luck to everyone.
Let's not forget that real estate is local. There are areas that didn't experience a slump, and others, like mine, that seem to be clawing upward.
Hi Matt, there is not question that is will take time to right the ship, but I think we are close to stabilizing. Thanks for the post!
Great post, I wish I could say I believe that the worst is behind us but as a loan officer I see more restrictions, more guideline changes, no down payment assistance programs (as of Oct. 1st) and that is what I am seeing today...so how hard will it be to move homes with a SMALLER pond of approved buyers. I think change can not happen over night but I just hope that our industry makes the necessary adjustments that will actually benefit the economy so that we do not end up back here again. The last thing we need is rules that make no sense and programs that will ultimately fail. I am in it for the long run as well and I wish you & everyone the best of luck!
Hi Matt, Still a lot of pessimism out there but many local markets are seeing strong support developing. Our market seems to be bumping along the bottom with increased buyer activity.
Matt ~ I think that it really depends on the market. I know that locally in Bellingham, WA all new construction stopped a couple of years ago and our inventory is on a decline. With limited foreclosures and less homes coming on the market, we will likely be seeing more pressure on demand coming this spring. However, we will likely be seeing an increase in interest rates too, so only time will tell.
Great post Matt. I agree with others in that real estate is local. So it really depends on what's going on in a particular area. But I agree, most (or those who can hang on) are in for the long haul. Good luck to you as well!
I agree with the "long haul" guesstimate -- it is about math, about supply and demand. Also, I think we'll see further bank failures, and that has a further dampening effect, short term.
I too think that you should focus on local market. My Market is also moving along...I am in Northern Michigan where we are blessed with fresh water surrounding us. Many of our sales are foreclosures and short sales, but we are still selling a lot of product.
If we can get by now we will do great when we really rebounds :)