A prediction on home prices
Irwin Kellner, chief economist for MarketWatch, in an opinion piece on the housing market today, predicts that the buyer's market could turn in favor of sellers "before you know it":
I would agree with those who say that it will take many months before balance is restored between supply and demand. There are simply too many homes for sale at asking prices that are still too high for housing to do a 180.Nor am I expecting another housing bubble to form, not in this decade anyway.
All I would like to point out is that, in broad macro terms, the average house is no longer as overpriced as it once was. That being the case, it is no longer prudent to assume that home prices have to fall a lot more before they stabilize.
All right -- your turn to opine:
UPDATE: Of the 47 who voted as of 7 p.m. today, 26 percent of you think 2010, 23 percent of you say 2009 and an equal percentage say 2011. Nineteen percent chose the "years from now" option, and 9 percent picked this year.
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Comments
"All I would like to point out is that, in broad macro terms..."
In broad macro terms, everything will come out in the wash. Next!
Posted by: MrRational | June 3, 2008 3:27 PM
I read Mr. Kellner's piece and one key part of his theory is that incomes continue to rise and that makes housing more affordable. I thought the stats showed that disposable income was falling because of higher fuel and food prices? People have less to spend on housing, even with rising incomes, because of higher costs of everyday living.
Posted by: Mike | June 4, 2008 9:41 AM
Hi, Mike -- nationally, inflation has been a major problem for average workers. Some states have faired a bit better (and last I checked, Maryland was one of them), but everyone's feeling the pinch of higher fuel and food prices.
Posted by: Jamie Smith Hopkins | June 4, 2008 9:47 AM