OK, here’s one that is sure to get all the housing bears out there feeling downright surly again.
The National Association of Realtors is forecasting that prices will rise 4 percent in 2010 after hitting bottom in 2009.
Home sales will also rise by 700,000 to 5.7 million, he argued.
Lawrence Yun, the association’s chief economist, made the sure- to- be-controversial predictions to the faithful assembled at NAR’s annual convention in San Diego last week.
He also noted foreclosures will top out in the first half of next year and the “fear factor’’ of falling prices that has put such a damper on the market will fade.
I guess you have to hand it to Yun, if nothing else, he’s not afraid to stick his head out there.
Still, given some of notoriety the real estate trade group earned for some of its predictions during the bubble years, this is risky territory.
Yun points to a pair of stats to back up his sunny forecast.
Intervention by the federal government through the home buyer tax credit has stabilized the market. Meanwhile, a two-year high in home resales in September shows buyers are eager to get back into the market, NAR’s economist contends.
You don’t have to be a doom-and-gloomer awaiting the final of the market next year to be cautious about Yun’s prognostications.
The economy is key here, and the jobless situation, if anything, looks like it is going to be worse than predicted.
We may well be headed for 11 percent unemployment or higher – that will surely keep a lid on demand while keeping foreclosures rolling along.
There’s also a powerful counterargument to the tax credit, that it is essentially feeding demand today by borrowing from future sales. Basically, we are getting people who would have bought anyway to speed up their decision by six months or a year.
Anyway, there’s a lot here for housing bears to rip into.
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