×

Analysts: Spring Not Rosy for Housing Market

ForSaleHouse.jpg

Spring is typically a robust time for the housing market, but this year, it will feel more like “arctic winter,” one economist told Mark Haines on “Morning Call.”

“This is going to be the worst housing recession in the last 50 years,” said Nouriel Roubini, chairman of RGE Monitor and professor at NYU Stern School of Business, adding that there is no bottom to the housing market. “If you buy today, you’re going to have a massive capital loss over the next two years. Home prices are going to fall by about 20% in the next two years. It’s a lousy time to buy.”

But while most analysts agree the spring selling season will not be as strong as in the past, analysts differ on whether this is a good time to buy.

Christopher Mayer, professor and economist at Columbia Business School, says the market is seeing a modest recovery, and it's the strongest buyer's market in the last decade.

“Houses aren’t selling the way they were two or three years ago, but that’s an unrealistic standard to use,” Mayer said. “Interest rates are still at enormous, historical lows. That is the most important fundamental for the housing market.”

“We’ll see trouble in a few markets, like South Florida, Phoenix, Las Vegas, but there’s no great depression in housing,” he added.

But Roubini warns that problems in the mortgage market are getting worse.

The massive credit crunch that started in the subprime sector is spreading to other levels, he said.