Pew Research Center surveyed more than 2,100 adults in March on their views about homeownership. What did it find? Some 81 percent of people surveyed “somewhat” or “strongly” agreed with the statement that homeownership is the best long-term investment a consumer can make.
-Chicago Tribune, May 8, 2011
I wonder how many survey respondents who comprised that 81 percent agreeing homeownership is the best long-term investment might be reconsidering their answer these days, in light of the latest developments with the U.S. housing market.
Last week, I blogged about CNBC real estate reporter Diana Olick declaring a double-dip for national home prices “official.”
And yesterday, MarketWatch senior columnist Brett Arends suggested that the housing bust is still on. From the MarketWatch website:
If you thought the housing crisis was bad, think again.
New data just out from Zillow, the real-estate information company, show house prices are falling at their fastest rate since the Lehman collapse.
Average home prices are down 8% from a year ago, 3% over the quarter, and are falling at about 1% every month, according to Zillow.
And the percentage of homeowners in negative-equity positions — with a home worth less than its mortgage — has rocketed to 28%, a new crisis high.
Zillow now predicts prices will fall about 8% this year and says it no longer expects the market to bottom before 2012.
Furthermore, Arends, who’s also a personal finance columnist for the Wall Street Journal, ridicules the idea of a housing “recovery” that a number of housing Pollyannas have been actively pushing for some time now. From the piece:
Here in America we have “zombie homeowners.” Millions of them.
According to Zillow, a record 16.3 million families are upside-down on their home loans. Sixteen million! And many are a long way upside-down. Their homes may never be worth as much as their mortgage. But they are hemorrhaging cash to pay the nut every month.
Recovery? What recovery? This looks a bit like a depression to me.
Olick and Arends aren’t the only ones predicting the slump in residential real estate will continue. Bloomberg’s Hugh Son wrote this afternoon:
A majority of the economists surveyed by Madison, New Jersey-based MacroMarkets predict prices will be flat or drop as much as 7 percent this year as foreclosures add to the supply of distressed properties.
Robert Shiller, the Yale University economics professor who co-founded the forecasting firm, said April 26 that values may decline “another 5 or 10 percent.” Morgan Stanley’s Oliver Chang is calling for a drop of as much as 11 percent.
To be continued.
In more ways than one, it sounds like.
Arenda, Brett. “Housing crash is getting worse: report.” MarketWatch. 9 May 2011. (http://www.marketwatch.com/story/housing-crash-is-getting-worse-2011-05-09?link=MW_story_popular). 10 May 2011.
Son, Hugh. “BofA Billions in Loan Losses at Stake on Moynihan Outlook.” Bloomberg.com. 10 May 2011. (http://www.businessweek.com/news/2011-05-10/bofa-billions-in-loan-losses-at-stake-on-moynihan-outlook.html). 10 May 2011.
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