Being the first week of 2011, it seems only appropriate to talk about predictions for the housing market. It seems like every economist has an opinion, and most of them aren’t good.

Calculated Risk found opinions among economists ranged from a drop of 5% to a possible 30% drop from current levels. Yikes! Then he concluded that he expects a 5-10% drop this year, and 2-3 more years of decline. Assuming a type of mortgage called an Option ARM doesn’t blow up, which is unlikely.

In fact, most experts agree that we shouldn’t even look for a recovery until 2013. This is in line with public opinion.

And then there’s Lawrence Yun, Chief Economist for the NAR:

“All the indicator trends are pointing to a gradual housing recovery,” said Lawrence Yun, NAR chief economist. “Home price prospects will vary depending largely upon local job market conditions. The national median home price, however, is expected to remain stable even with a continuing flow of distressed properties coming onto the market, as long as there is a steady demand of financially healthy home buyers.”

Notice how he hedges his bets in the last sentence: stable prices “as long as there is a steady demand of financially healthy home buyers.”

Yun is perhaps the most optimistic man in the whole real estate industry, and granted this is part of his job. Frankly, if he ever gets pessimistic about housing, I will be absolutely certain that we are putting in a “panic” bottom. As it is, I find it difficult to swallow the most pessimistic of predictions. Remember that housing markets, like politics, is a local affair. Just because some other regions have far to fall doesn’t mean that Vegas does as well.

Tags: Case-Shiller, home prices, housing statistics, Lawrence Yun, NAR, predictions

This entry was posted on January 5, 2011 at 12:28 pm. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

Posted in General Real Estate by Bridget Magnus 1 Comment