Economists: Improved housing market forecast
Two top housing economists forecast some encouraging predictions for the housing market over the next few years.
Lawrence Yun, NAR chief economist, and Mark Zandi, chief economist and
co-founder of Moody's Economy.com, agreed that job creation is key to an
economic and housing recovery, with job creation expected as the year
progresses. But they differed somewhat on the impact that foreclosures will
have on home price stabilization. Both project that home sales will rise
over the next few years.
Yun expects a slightly stronger demand for housing and a fairly even level
of foreclosures entering the inventory pipeline before easing in 2011. "We
expect distressed home sales to account for 30 to 40 percent of transactions
for the remainder of this year," he said.
Zandi also forecasts improving demand for housing, but with foreclosures
rising later in 2010 before easing in 2011. "The housing crash is over –
nearly. We are now near the bottom," he said. "[and] it will take two more
years to work off excess housing inventory at the current sales pace. Of
course, if demand picks up, it would take less time for prices to rise."
With improved market fundamentals and rising consumer confidence, Yun thinks
home prices could rise 2 to 3 percent this year; but within the next two to
three years, he suggests there could be stronger upward pressure on prices
from a potential housing shortage because housing construction has fallen
significantly below long-term demand.
Posted: 17 May 2010
Source: Florida Association of Realtors
Click here for original article
