I think it's hard to say, but it is a pretty good forecast in my opinion. Most housing folks have been saying a recovery will be in full swing by mid-late 2010. The reason there are doubts for me is the unemployment rate is high and doesn't look like it will be making much progress in the near future. There are also two other main factors in my view that may push that forecast back, high numbers of foreclosures and shadow inventories that will emerge once the recovery truly begins.

Jamie, you keep lobbing these softballs up and we'll keep knocking the snot out of them as they sail over the fence.

"a housing-industry information provider"
hahaha

How many of them have there been? Where are the previous holders of these illustrious positions?

shill:
-associate of a person selling goods or services or a political group, who pretends no association to the seller/group
-paid to endorse a product favorably, while pretending to be impartial

"Shill" is in the eye of the beholder, MrRational, but I haven't found the Metrostudy folks to be the "now is the time to buy no matter what the time" sort. That doesn't seem like their line of business, in any case. They track lots, starts, closings, pricing, etc., to help builders decide how to position themselves.

That doesn't guarantee the forecast is right, though. Time will tell.

Man, Mr. Rational, now you are not living up to your name. I wouldn't consider them to be "shill" at all. A couple reasons are that they are primarily are market research firm, which you would have noticed if you went to their link. I don't know what kind of actual bias they may have, but I just don't see it that way. Second, they are not exactly on the cutting edge with these opinions. Most people are predicting at Summer/Fall 2010 recovery. Now the National Association of Realtors is another story, they always say a massive recovery is going to start tomorrow and when it doesn't they just say the next day and so on. They fit your description.

I like reading about these types of predictions and the basis behind them. Check out there site, it's not too bad, but like Jamie said, only time will tell.

I think its way too early to tell. I want to see how the market responds to the $8k housing credit expiring (assuming it expires). I can't tell if a high number of people planning to buy in 2010 moved up their purchasing time table to 2009 just for the credit.

For Maryland, I think the unemployment issue is hard to figure out with a bunch of the BRAC folks coming in next year.

mea culpa. I leapt before I looked and attributed motivations to their conclusions and observations that were unwarranted.

In my defense, I got a late start this morning and that was a pre coffee post. I shall strive to do better in the future.

Is everyone aware of the impact the Fed's mortgage rate manipulation program is having, and what the effect of pulling it Q2 2010 will be?

1. The Fed is making 85% of all mortgages right now with freshly printed money. There is a limit to how much of this they can do while saying they are concerned about inflation with a straight face.
2. A 1% move in interest rates=an 11% move in purchasing power. Ex, if you were could afford a 250k house at a 5% interest rate, you can only afford a 237k house at 6%.
3. Point #2 applies to every buyer in the market and serves to turn 250k houses into 237k houses.

There are 3 options:
1. Pull the Fed rate subsidy and housing prices WILL fall further, the only question is exactly how high rates will go and exactly how low prices will fall.
2. Keep the Fed rate subsidy program going indefinitely. The price of housing measured in dollars will be higher, but measured in anything else, gold, gallons of gas, gallons of milk, or loaves of bread, it will be lower.
3. Pursue real pro-growth policy that leads to higher wages and allow those higher wages to drive up prices.

One thing the prior decade showed us is that asset appreciation brought about by financial engineering is unsustainable. The supports being offered now are merely financial engineering, be it on a much larger scale than Wall Street.

haha, good man Mr. Rational. I understand the pre coffee reaction.

I have to agree with Josh on this one. Except, the Fed is buying 100% of the MBS for Fannie and Freddie. Ginnie Mae is even being purchased by the Fed and FHA is going to need a bailout of about $30 BILLION!!!! All the bad loans are now going FHA and their loan quality is diminishing showed by the near 20% default rate on loans originated in '07 and '08.

The shadow inventory is estimated at about 7 MILLION homes. These homes are the ones who are stalled through various Moratoriums in states such as California and Florida, who make it take much longer to foreclose. Some of those people have gone 2 years without making payments!!!!

The problem with MD is that the prices are still too high and sellers are not willing to lower their price. The only homes that are being sold now are distress sales such as foreclosures, short sale, REO's, Estate sales, etc. Homeowners are not willing to face reality and accept the fact they are upside down on their home. You are going to see more and more "strategic foreclosures", and we are talking about folks who have over 700 credit scores.

Wall Street may be up, but Main Street most certainly is not. Unemployment continues to rise and many fear that they could lose their income in the future. When people are worried about future obligation, they won't take on new ones, ie. a mortgage.

I see this playing out until 2012. The best way to solve the problem in my opinion is the Bankruptcy Bill that will allow the Judge to modify the mortgage. Most homeowners who even qualify for a loan modification are not getting it because the lenders continue to refuse to work with them. Millions more will continue to lose their home and prices will fall further since there will continue to be distress sales.