Further derailing in the housing market for 2008?
My question isn't whether or not housing will be weak. No doubt market perception will still linger throughout 2008, where the only light in the tunnel might be taken into consideration at earliest 3Q2008. In addition, the collapse in mortgage industry financing last year, the demise of the subprime housing market, an upcoming period of higher “resets,” high home inventory levels and tighter overall lending standards will continue to depress housing
activity. However, even though housing will remain “weak” again this year, the issue for overall economic growth is whether housing activity weakens “faster” than it has in recent years. We're starting the year with a level of housing starts almost 50 percent below peak recovery levels. Real residential spending has declined at an annualized rate of almost 17 percent in the last six quarters. My question is HOW weak will the housing market going to be this year?
Best Answer
2775 points
Oldman answered one year ago …
There are sections of the country where the housing market is not "Weak".
In other places, the inventory of new homes and foreclosures will take > 10 mos. to clear. Prices will continue to slide for another two years. While Homebuilders (ITB) may show an uptick from panicked selling, the lenders are increasingly reluctant to loan anyone anything: retail and commercial will also slide, because retail and commercial are also overbuilt...and their revenues are decllining with the decline in GDP and the $'s weakening.
I don't believe (based upon seeing Real Estate cycles over the past 60 years) that the normal real estate transactions and modest building of a mid-cycle stage will occur until 2010.
Now you can contrast that with China, where urban real estate is booming, and will continue to do so for a generation, as 1 billion rural people move to cities. The problem with us investing there, is the lack of transparency and probity of the real estate market..there's one NEW Chinese real estate ETF (TAO), which may be of interim advantage.
Answers
3963 points
MNSL answered one year ago …
I totally agree with Oldman. Definitely housing market will be very weak in 2008. Pl remembers once market collapse it takes longer period to recover. Fundamentals and sentiments are very weak for housing market now. We have to be very careful when we try to buy real estate now.
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