Nice, compelling headline . . . YES?
Well, don't get too excited, folks. The bottom is likely not IMMEDIATELY in sight, but it is possible, sometime in 2009.
At the National Association of Homebuilders Conference last week, several of the econmists who attended saw a bit of hope on the horizon. "I'm hopeful threat the markets will come to their senses soon," said Michael Moran of Daiwa Securities America at the Conference last week.
Moran and others point to the Fed's Bailout Plan, including the government purchase of bad mortgage debt, will help housing recovery.
David Seiders, Chief Economist for the NAHB, feels that pent-up demand, along with declining prices, promotional incentives, dropping numbers of housing starts, and predicted rate moderation for mortgage loans, should help create market rebound sometime in 2009.
Be cautious, however, and not too optimistic! Many economists point to several factors that could delay the housing market rebound.
First of all, the U.S. Unemployment Rate is up nearly 39% compared to last year, currently 6.1%. It may reach as high as 8% next year, some experts predict. Nationally, median home prices have fallen 20% from their peak in 2005, but will probably decline another 10% or so before stabilizing, others say.
Across the country, roughly 12 Million homeowners are currently under water on their mortgages - they owe more on their home than its current market value. Thousands more foreclosures are likely well into next year.
And, importantly, supplies of homes for sale is bloated in most U.S. Metro Markets, including Chicago. Supply is expected to out pace demand for at least another year, perhaps longer.
So the pain of perhaps millions of U.S. Homeowners close to default, and in danger of losing their homes, is far from over.
When the market does rebound, homes will likely be worth considerably less than they were at the peak of the recent boom - but they will be more affordable. Loans will be available - but only to those with qualifying credit and moderate equity available.
But, eventually - hopefully, sooner rather than later, the downward spin of the housing market will ease, and the housing market will return to something that resembles comparative normalcy?
You think? Hope so!
See our post today via BlogChicagoHomes.com for more, as well as a link to June Fletcher's story in yesterday's Wall Street Journal.
DEAN & DEAN'S TEAM CHICAGO