Housing Sector May See Mild Growth -- Or Steady Decline
Is the housing sector doing better than consumers think -- or are some market boosters guilty of "cherry picking"? That was the debate that raged on "Morning Call."
David Michonski, CEO of Coldwell Banker Hunt Kennedy, is firmly in the "pro" camp: he said that "we do consumers a real disservice to tell them that prices are dropping." The C-level executive concedes that last year, median home prices were up merely 1.2% -- "a lot less than the 8, 10, 12, 15% gains we'd had" -- and points out that traditionally, real estate rises some 4% annually.
Thus, Michonski says it's important to remember that if 2006 was below average, still, the market was well above average for years -- and the correction is no surprise.
But Dean Baker, economist & co-director at the Center for Economic & Policy Research, has a more moribund view: "It's hard to see how prices won't drop more," he said. Baker exhorted CNBC's Liz Claman to "compare now to last year": he said that inventories are 20% greater, the market is beset by "desperate sellers," foreclosures, and a record high for ownership-unit vacancies. The economist rebuffed Michonski's muted optimism, declaring that the CEO is "cherry-picking [results] month to month."