Although we've heard many optimistic scenarios from economists predicting when housing prices will reach bottom, an analysis from Mark Zandi, chief economist for Moody's Economy.com is predicting the fourth quarter of this year. For those of you who might have recently watched Dr. Zandi's testimony in front of Congress on the subject of economics and government bail-outs or read his book "Financial Shock" (which I reviewed for Inman News in 2008), he's not ever been a housing bull. From a BuilderOnline.com story:
Zandi, along with his colleagues, think that "a bottom in the housing market is coming into view," according to "Housing in Crisis: When Will Metro Markets Recover?" a paper recently released by Economy.com. "The market's correction to date has been substantial, wringing out many of the excesses that precipitated the crash," the researchers say. "More than three years since the market began correcting, inventories are flattening, prices are coming back down to earth, and sales are approaching stability."
According to research done by Zandi, housing analyst Celia Chen, Credit Analytics Director Cristian deRitis, and Economist Andres Carbacho-Burgos, the housing market's low point probably will come in 2009's fourth quarter, as measured by U.S. national home prices, which will have fallen 36.2% from their peak in 2006's first quarter.
That's a national number, though, which means that some markets will recover sooner and others will lag behind.
For example, Moody's Economy.com researchers project thatSanta Cruz/Watsonville, Calif., will hit bottom in 2009's third quarter, when its home prices will have fallen 44.3% from the area's 2005 peak. Other markets are trending downward. Homeowners in Miami/Miami Beach/Kendall, Fla., will have to wait more than two years—to 2011's second quarter, when home prices will have plummeted 66.4% from their 2007 highs—for their home prices to stop eroding...
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