What Will Happen To The Housing Market In 2007(Are you tired of hearing contradicting reports predicting the near future of the housing market?)
Every day in every newspaper or especially on the Internet, there seems to be at least one article that says the market will continue its slump through 2007 while another article claims the correction is just about over and 2007 will bring a balanced housing market.
The way the information stacks up, it is difficult to decipher which direction the market is going towards and what we will be facing in a year. After all, one year ago today, the housing correction was just beginning. Twenty percent sales declines? Price declines? That couldn’t happen, right?
To help you decide what the real estate housing market will produce in the near future, you can believe what you want from two contrasting articles, “Survey: Consumers confident home prices will rise,” posted November 14, 2006 on Inman News and “Countrywide says housing slump has a year to go,” published November 14, 2006 by Reuters and posted on news.yahoo.com.
“Housing demand should stabilize in short order, and the downward adjustment to housing production should run its course by mid-2007. The market that emerges from this correction will display good balance between supply and demand, and move to a healthy and sustainable trend based on solid underlying fundamentals,” said National Association of Home Builders (NAHB) Chief Economist David Seiders.
While the NAHB admits the correction is not going to immediately end as 2007 begins, the market is expected to return to normal by mid-year.
On the other hand, “The slowdown of the U.S. housing market will last through 2007 as inventories are pared enough to prompt a change in consumer psychology, the chief executive officer [Angelo Mozilo] of the nation's biggest loan web lender [Countrywide Financial Corp.] said on Tuesday.”
Now, the survey reported by the Inman News article stipulates that home owners are confident that their home price will rise. But this is said to be over five to ten years. That is an obvious statement as history has demonstrated that owning a home is one of the most valuable investments over time.
“‘The poll clearly debunks the more sensational media reports speculating on the demise of the housing market,’ said David Pressly, president of the National Association of Home Builders (NAHB) and a home builder from Statesville, N.C.”
Really? Clearly this is a misstatement considering that the survey included 2,000 households. Considering the amount of households in the United States, 2,000 can not make any argument stand out.
The article posted on Yahoo seems to have more sufficient evidence of why the housing market will slump for at least another year.
“‘We have another year of adjustment, or transition’ in the industry until consumers believe home prices won't decline, Mozilo said. ‘Various events will make the change take place and one of them is’ a decline in available homes, he said.”
Buyers are still showing hesitation in the market as they realize the market is finally in their favor, after several years of watching sellers reap all the benefits.
The more sellers wait, the more prices will decline, for now.
Owning a home is always a wise investment. When to buy is the question that will determine how long the correction or slump will last.
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