Is Housing Really in Recovery?
During one of my reports today on how gas prices could affect the housing recovery, one of the anchors asked me if I really believe there is a housing recovery right now.
That's a very good question.
Yesterday, the Realtors chief economist questioned it himself.
Today a new report from Robert Shiller's outfit, MacroMarkets, found that of 111 housing market experts and economists surveyed, nearly half foresee a double-dip in home prices happening this year, "and not a single panelist expects national home prices to recover to the pre-bubble trend in the coming 5 years." In December, only 15 percent projected a new post-crash low would materialize for home prices. We are now less than 1 percent away from that mark, according to the survey.
"Overall, the sentiment among our expert panel regarding the U.S. housing market outlook continues to deteriorate," writes Shiller. "Now they are expecting only a weak recovery, and even that is not until 2013."
This report comes on the same day that Fannie Mae's chief economist put out a report claiming uncertainty in Japan and trouble in Libyawill directly affect housing's recovery, specifically citing rising gas prices.
"We expect home sales to remain soft in the near term, given uninspiring leading indicators," notes Doug Duncan. It's really uninspired and fearful consumers, though, that will stunt the recovery.
"They're looking at the weakness in the economy, now battered by our relationship with Japan and a rise in oil prices, and they're asking, is this a good time to borrow $200,000 to buy a house? I don't think so," concludes Duncan.
You might think gas prices are a lame excuse for another dip in housing, but they're not.
In the Spring market, historically, families are looking to move out and up to a larger home. Those homes are usually further from the city center. Transportation costs are most definitely a factor, especially for low to middle income buyers, who happen to make up the bulk of the market.
Yesterday I noted that stock market investors didn't seem to care about the nearly 10 percent drop in existing home sales in February. Tomorrow morning we get numbers on the sales of new construction. As opposed to existing sales numbers, these numbers are based on contracts signed in February, not closings. That means the numbers should be somewhat better, given that's the beginning of the real Spring market. Stay tuned...