The general consensus is that the recovery in housing will be slow and will take several years before you see substantial price appreciation. It is also understood that there is a large shadow inventory which will bog down prices delaying the recovery. While we have certainly gone through the worst housing crisis since World War 2 and it is almost impossible to overly exaggerate the impact, it is also important to understand that confidence can drastically alter this “consensus” view. As a matter of fact “consensus” is rarely correct on larger macro calls such as housing forecasts, particularly when such a large percentage of forecasters are overwhelmingly bearish. Not too long ago the majority of home buyers were worried about getting priced out of the market, or were speculating on the seemingly inevitability of housing price increases. Now when I speak with people about buying a home they are trying to time the bottom of the market, with the usual comment of “I still think that the market has another 10-15% to go down.”
The following article by Tom Brown provides some additional commentary on the subject. http://www.bankstocks.com/ArticleViewer.aspx?ArticleID=6431&ArticleTypeID=2 Thank you very much and I hope that you enjoy!
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