Housing Market To Rebound Slowly

[Jun 9, 2008.]

 

The housing market’s decline was not a quick one and its recovery will not be either. The market enjoyed record sales between the years of 2001 and 2005 only to have the market decline shortly there after. The end result was the sub prime mortgage crises which has rippled through the entire economy and is now affecting the world economy as well.

Forecasters see an end in sight but state that it will not come quickly or easily.

“This is going to be another difficult spring,” stated the chief economist for Moody’s Economy.com, Mark Zandi.  Zandi like many others are hopeful about the housing market. Not all the signs are pointing to this optimism as several experts point to the number of homes on the market and the slow down of the construction industry.

The construction industry which enjoyed an increase in profit during the boom years of the housing market has all but stagnated. Many are saying that the industry has not been this bad since World War II.

Since there are so many homes on the market, there is really no need to build new ones. The increase in inventory is also responsible for driving down house prices.

However, many state that with a decrease of prices there is bound to be an increase in sales.

“Lower prices and low interest rates are starting to generate results” Lawrence Yun said. Yun is the chief economist of the National Association of Realtors which keeps track of home prices. Some areas that have been the hardest hit by the housing market have seen an increase in sales such as California and Florida.

The housing market is expected to even out sometime late this year while prices are expected to rise later in 2009. Even though homes are at the lowest price in decades consumers are unwilling to buy since it is possible that these prices will continue to fall.