Has the housing market hit bottom? It depends on where you are – and whom you ask. Developments posed the question to a handful of economists, real-estate agents and industry watchers. Here are their thoughts:
Rick Sharga, executive vice president, Carrington Mortgage Holdings: “I think we’re either at or very, very near the bottom, and that prices will stabilize on a national basis this year. Unfortunately, the recovery is going to be a bumpy ride along the bottom for the next couple of years while the market absorbs the overhang of distressed inventory. Prices will come back more rapidly in some markets than others — largely along the lines of how healthy local economies are — but nationally, we probably won’t see significant, sustainable home-price appreciation until 2015.”
Michael Feder, CEO of Radar Logic: ”Now is when the housing market should show significant seasonal strength. So far, the numbers appear to be the result of a pull-through effect of a mild winter. Our main concern is the fact that with so much unsold inventory, both listed and shadow, any shock to the system will hurt the already fragile psychology of the housing market. Good news will be met by more distressed disposals. Bad news could really hurt. With the distressed market trading at a 25% to 30% discount, a negative shock could cause the market to converge toward this level, meaning a further correction.”
Vance Shutes, associate broker for Real Estate One in Ann Arbor, Mich.: “I think we bottomed in the winter of 2010/11. The Ann Arbor market saw prices up 3% last year, but the rest of our area was flat. This year, almost all areas are up in price. The No. 1 issue we face is that appraisers can’t keep up with the sales prices. Again, anecdotally, we have buyers bringing huge amounts to closing because the seller won’t come down to the appraised value, so the buyer has to make up the difference between sale price and appraised value for their mortgage. It’s crazy. The appraisers got the blame for the huge run-up in prices in the 2000s, so they are hesitant to do it again.”
Tom Lawler, independent housing economist: “As always, of course, real estate is local. Nationally, however, I believe the housing market has bottomed, both in terms of production (starts), sales, and, with a lag, prices. Don’t expect rapid rebound…”
Brad Hunter, chief economist for housing-information service Metrostudy: “There’s two kinds of bottoms: Housing starts and prices. I think we reached the bottom at least a year and a half ago for housing starts and housing demands. For prices, in some markets we have reached bottom–but not all.”
Glenn Kelman, CEO of Redfin, a brokerage: “We hit the bottom last year. I don’t think that means it’s going to be a V-shaped recovery. There will be ups and downs and sales volume isn’t going to recover in any meaningful way. You’ve got the investor demand and you’ve got some homebuyers who qualify, but you don’t have the breadth and depth for a bull market for a real rally that is national in scope.”
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