Home Purchases Rise, Home Prices Still Falling
Billionaire Sam Zell made an interesting housing market prediction last week, saying that he expected home prices to bottom-out at the end of March 2009, but some economists believe otherwise. One such economist, Michelle Meyer with the Lehman Brothers Holdings Inc. in New York, does not feel so confident that housing market prices will stop falling by the end of 2009’s first quarter. Instead, she predicts that it will not fully bottom-out until the end of 2009 itself. Why might some economists feel this way? Despite the fact that home buying across the U.S. has lately risen, the number of available properties on the market continues to climb.
Bloomberg.com’s Shobhana Chandra provides the full story:
“Aug. 25 (Bloomberg) — Sales of previously owned homes in the U.S. rose 3.1 percent in July, a gain that masked further housing weakness as inventories of unsold properties increased.
“Resales advanced more than forecast to an annual rate of 5 million, with at least one-third of the purchases coming from foreclosed properties, the National Association of Realtors said today in Washington. At the same time, the median price dropped 7.1 percent from July 2007, and the number of homes for sale jumped to a record.
“Sales averaged a pace of 4.95 million the past three months, the same rate as the previous period, indicating that purchases may have touched a bottom. At the same time, the glut of houses for sale means property values will probably keep dropping, putting pressure on household wealth and consumer spending.
“‘Existing home sales have likely stabilized,’ Michelle Meyer, an economist at Lehman Brothers Holdings Inc. in New York, said in an interview with Bloomberg Television. ‘In terms of demand, we’re probably close to the bottom. In terms of prices, we don’t think we’ll see a bottom until the end of next year.’”
Read the full article, “U.S. Economy: Home Resales Rose More Than Forecast.” Copyright 2008 Bloomberg.com
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Tags: bank foreclosures, fannie mae, foreclosure homes, foreclosure investing, foreclosure news, foreclosure problem, freddie mac, Real Estate, real estate bubble, REO, Zell
