An end to the housing slump? One analyst says it’ll happen this year
As anyone who’s trying to do it will tell you, it’s no easy task to sell a house these days. Buyers have more homes on the market to choose from, making for some intense competition between sellers. Gone are the days of full-price offers and multiple bids on a single home.
But there may be some relief in sight for struggling homesellers. One prominent real estate industry analyst is predicting an end to the housing slump in 2009.
Karl Case, co-creator of the well-respected Standard & Poor’s Case/Shiller home price index — a nice barometer of the strength of the housing market — in a recent Bloomberg.com story said that the housing recession might end in 2009 because new homebuilding is at a record low.
With fewer homes being built, Case argues, the laws of supply and demand should kick in. Buyers will have fewer homes from which to choose. This will bump up the value of those homes that are available.
At least that’s the theory, and the hope of homesellers.
Homebuilders began construction on 550,000 houses in December, according to the Commerce Department. That’s the lowest number in five decades. At the same time, the sales of new homes in the country dropped in November to 407,000. That is a 17-year low.
Case has even gone on record as saying that 2009 won’t be a terrible year for the housing industry. This is an incredible statement. Everyone else I’ve talked to or interviewed has said the opposite, that 2009 will be one of the toughest years for both the housing industry and the economy.
Is Case right? I sure hope so. I know I”m getting tired of all the bad news surrounding the housing industry. Like most people, I’m searching for at least a glimmer of good news. Case’s prediction might just have to be that glimmer.
