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The recovery in the housing market is still alive, barely.
Tuesday, January 26, 2010
At the moment the housing market in USA stands at the crossroads. Optimists foresee a total recovery by 2011, but pessimists believe recovery is likely to lack vigor and may take a longer time. The boom time between 1997 and 2007 forced folks to flee to the exurbs in many regions unable to afford the rapidly rising house prices. The population explosion in Riverside County, California and Loudoun County near Washington DC are glaring examples. The big question is if it is that easy to recover from the domino effect of disasters till and after the bubble burst in mid 2005.
According to NYTimes
The recovery in the housing market is still alive, barely.
Home prices managed a 0.2 percent seasonally adjusted gain in November from the previous month, according to the Standard & Poor’s Case-Shiller Home Price Index.
The data, released Tuesday, reflected frenzied activity in 20 major cities as people competed to buy houses to take advantage of a government tax credit. But all those sales did not produce much more than flat prices.
A second index released on Tuesday showed a healthier market. The Federal Housing Finance Agency said its price index, which uses data from mortgages that have been sold to or guaranteed by the government, rose 0.7 percent in November from the previous month. But the agency also revised its October figures downward.
To blur the picture even more, a third national housing price index was released last week. Issued by the data firm First American CoreLogic, it showed a decline of 0.2 percent in November.
Put all these indexes together, and a portrait emerges of a market going nowhere.
The winter pause that people thought was going to happen seems to be happening, said Maureen Maitland, vice president for index services at S.& P.
A pause is certainly better than a plunge, which is what was happening during 2007 and 2008. But sales have slowed markedly since November. It is only a matter of time, the analysts say, before prices also undergo at least a slight dip.
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2 comments:
The very recent worry of the US Federal Reserve that waning government support could cancel the recovery process when many pundits saw this as a favorable period to go for asset purchases.
The shadow of this big question looms large!
Mortgage rates had risen, speculative investors, resort buyers along with trade-up buyers went underground, first time buyers were priced out of the market, the sub-prime mortgage industry collapsed, major lenders went bankrupt and homebuyer confidence was at an all time low. Today consumers are retrenching and paying down debt and not extending debt burdens. The Federal Deposit Insurance Corporation recently is trying hard to convince lenders to provide borrowers with respite from mortgage payments. All these and much more that do not appear before our eyes has created a Frankenstein out of greed and gluttony of whomsoever we can blame!
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