Listen Up Class, We Have More On Housing And It’s ‘Worth’ Your Attention, Pun Intended
Posted By thestatedtruth.com on January 28, 2012
One would expect that with mortgage rates at record lows, extraordinarily accommodating weather, distressed sales being, as he puts it, “actively metered” by the banks and home-builder sentiment spiking, December results would have been a heck of a lot better. Instead, Mark asserts, “net-net this market segment continues to worsen.”
The low end of the price range, he points out, continues to be where the action is, “while anything over $300,000 is dead.” Moreover, the months ahead do not look very promising for the upside on housing, since he envisions more distressed supply coming to market as foreclosure completions spiral up to a multi-year high by the end of this quarter.
Robert Campbell, who publishes “The Campbell Real Estate Timing Letter,” and like Mark is savvy in the ways and wiles of the housing industry and has the record to prove it, is also in the bearish camp. Most particularly, he believes that home prices will plunge further this year, despite the lowest mortgage rates ever and the highest affordability levels in over two decades.
Housing prices, Bob contends, remain pressured by the pocketbook pinch on consumers burdened by weakening median income and heavy indebtedness, along with the formidable inventories of distressed properties that relentlessly batter the re-sale market.
He reckons inflation-adjusted home prices will have to drop another 10% to 15% before they stabilize. And he warns that even when they finally stop declining, prices are likely to bounce along the bottom for years before we see anything resembling a real bull market in housing. Investors, take heed.
Honestly, we don’t mean to pick on the home builders. But no economic recovery within memory ever amounted to all that much with housing flat on its back. And we fear this one is destined at best to continue to labor along until that critical industry shows reliable signs of righting itself.
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