More analysts say housing market has hit bottom
Chase CEO and Fannie Mae economist see improvement in 2012. But another analyst says recovery is still a long way away.
Add another voice to those saying the housing market will really, truly, finally hit bottom in 2012.
"We have seen the worst. We are at the bottom. We may hug along the bottom for a while, but we are at the bottom," Jamie Dimon, CEO of JPMorgan Chase, told Maria Bartiromo in a Q&A published in USA Today.
That doesn't mean that happy days are here again, he cautions, but there is light at the end of the tunnel.
"Supply and demand are rapidly coming in balance," he said. "Renting is now more expensive than buying in half of America. We're adding 3 million Americans a year … 2 million jobs, and all this shadow-inventory stuff will be getting better, not worse. And it's the rate of change which is important, not the absolute level."
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He added: "It's still terrible, by the way. But we think it's going to get better over time."
Fannie Mae chief economist Doug Duncan agrees with Dimon that housing is ready to start adding a small boost to the economy.
“With an expected improvement in housing activity in 2012, residential investment should start contributing to growth, albeit only modestly initially,” Duncan and Orawin Velz, a director in Fannie Mae's economics and mortgage-market analysis group, wrote in a Fannie Mae forecast released last week. The two predicted that home sales would rise 3.5% in 2012 and that housing starts would rise 16%.
Despite rumors to the contrary, real estate will continue to struggle not only in 2012 but well beyond. The bursting of the real-estate/mortgage bubble is not something that is solved in the course of a couple of years – especially in a case where the excesses took two decades to accumulate.
What's your prediction? Will real estate hit bottom and start an upturn in 2012? Or are there many more bad months ahead?
I plan to buy a second home in the White Mountains of NH, and close the deal in April.
I am convinced that now is the time to buy. I have an appraiser working on the house I want, and I will make an offer immediately based on the appraised value.
Prices are down about 30% from their highs, interest rates are very low, and big inflation is on the horizon.