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Are we there yet?

Forget horse racing, presidential elections and stock picking. The in thing to predict nowadays is when the housing market will start improving.

Fannie Mae's CEO says his best guess is 2010. Delta Associates and analyst John McClain of George Mason University, both speaking of our neck of the woods, say 2009 and the second half of 2008, respectively. Cyril Moulle-Berteaux, managing partner of hedge fund firm Traxis Partners LP, opines in a Wall Street Journal piece that the housing market already hit bottom last month.

But why let them have all the fun? You've been paying attention -- obviously, as you're here -- and you have opinions.

So: What's your forecast, either for the Baltimore area or the nation as a whole? Feel free to leave a detailed comment or just a date.

Comments

Continued price declines accelerating during the summer of 2008 and continuing this pattern until 2010. From 2010 forward, it will depend on interest rates, inflation, and whether we are still in a recession or do a double dip recession.

There is no problem with market, but rather with too high prices. You have yourself recently published an article witnessing increase in fairly priced housing...so, the sooner the prices get real, the sooner will the crisis talk cease. It surely is too bad for those who put all the eggs into the basket of endless price growth, but it's their credits...

Price declines will continue indefinitely if the credit market is tightened indefinitely. The median down payment in Baltimore continues to be 5%. That cannot persist and can only go up. When I see that majority of sales occur with 20% down payment, then I'll believe the price will stablize.

With the cost of everything increasing (i.e., gas, milk, fruit, etc.), what makes everybody think that home prices will continue to fall indefinitely?

I'll second Sean's observation about down payment percentages.

Until buyers are financially committed to the transaction by the larger initial investment, the price and financing numbers associated to the transaction will remain as skewed as they are today when compared to the home ownership investment stability typical of decades past.

When we look back at the price decline and 'recovery' after it happens (and it will) it will graph out as a "U" rather than a "V".

The real question is how long that bottom will last once we have gotten there and of course who is included when saying "we". \______/

For myself, I'd welcome that flat bottom. Houses are supposed to be bought for shelter and NOT as vehicles of investment growth.

Florida, California and Michigan probably warrant being categorized all on their own to not pollute the numbers the rest of the country use.

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About the blogger


Jamie Smith Hopkins, a Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
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