U.S. Home Prices Are Poised to Climb
Bloomberg -- "Prices for U.S. homes may climb as soon as the third quarter, ending price declines as a drop in foreclosures makes more home available for sale, said Housing and Urban Development Secretary Shaun Donovan. “It’s very unlikely that we will see a significant further decline,” Donovan said on CNN. “The real question is when will we start to see sustainable increases. Some think it will be as early as the end of this summer or this fall.”
Home sales have increased in six out of the past nine months and the number of property owners in default is declining, Donovan said on CNN’s “State of the Union” program. Housing prices will begin rising as the number of foreclosures declines, he said. “In the long run, it’s a good time to buy,” Donovan said. “It’s so affordable today compared to where it’s been for generations.”
Home sales have increased in six out of the past nine months and the number of property owners in default is declining, Donovan said on CNN’s “State of the Union” program. Housing prices will begin rising as the number of foreclosures declines, he said. “In the long run, it’s a good time to buy,” Donovan said. “It’s so affordable today compared to where it’s been for generations.”
Related: Real estate bidding wars are back in some D.C. areas.
HT: Gary Lyle
11 Comments:
Still a bit of shadow inventory to be worked off in places like California, Nevada and Florida.
Long term? Sure, prices will rise. But the question is that of opportunity cost in the short run. And one can always buy homebuilding stocks and/or a few of Shiller’s housing futures contracts to satiate one's bullish enthusiasm.
Are they talking real dollars or nominal dollars? I.e., are they predicting inflation or are they applauding the bubble re-inflating?
I can't take this as a positive sign. First of all, this is merely an empty opinion - as empty as the previous "prices are only going up, buy now" I used to hear ten years ago. Speculation about the future is just unreliable.
Second, this is one of the most tortured markets in the United States. The government has been blowing up this bubble for a long time, plugging the holes from the bust and then trying to re-inflate it.
And then there is the issue of excess inventory (arbitrage should add Florida to his list - and probably many other regions). And what will happen when inflation, which we are currently exporting to countries that peg to the dollar, comes home to roost? How many more mortgages sold to Fannie Mae will be underwater then as BB has to raise interest rates to combat it?
When an unmolested market rebounds, i can take it seriously. When Frankensteins rise from Bernanke's and Barney Frank's operating table, I just shudder.
How well did Bloomberg predict the crash? I'm guessing not very well.
I also wonder about the reliability of Bloomberg both in their reporting and their 'guesstimating'...
Still banks are going to have to losen up a bit with their cash, right?
David Schawel over at Economic Musings has the following: Banks hoard cash & securities as loans contract
'Looking over the FRB’s bank data, clear trends emerge with respect to the growth (or lack thereof) in the banking system. Looking at seasonally adjusted data for commercial banks, total loans & leases are down 2.4% YoY. Declines in real estate (-5.4%) and Consumer (-6.6%) overcome moderate C&I growth (+3.3%). See graph below which shows YoY C&I and Real Estate changes. It is difficult to distinguish how much of the real estate contraction is attributable to write-downs versus maturing loans not rolled over'...
Still banks are going to have to losen up a bit with their cash, right?
But as the Fed printed money, it also tightened lending standards for member banks.
Rosy predictions from government agent Shaun Donovan. I heard him talking over the weekend. He learned nothing from the subprime housing crash. The administration is in campaign mode, the only thing they do well.
Some people have the screaming meemies about pending inflation. I do not.
Real estate is affordable now, that's fo sure.
Big run-ups?
The overall demand picture in the economy is weak. We are down 7 million jobs from the peak.
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re: 'Real estate bidding wars are back in some D.C. areas.'...
Could it be: Government Salaries Soar Under Obama?
A government bureaucrat says home prices are poised to climb?Okay, that settles that. I am sure they are as accurate in that as they are in the need for licenses to braid hair,operate a food truck, the need for high speed rail services costing billions, an $800 billion stimulus package to keep unemployment below 8%, etc
I guess that this means that the USD is about to tank and that QE2 will be replaced by more easing in some form.
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