Wachovia economist Mark Vintner is calling a bottom for housing later this year or early next. Vintner notes the recent deceleration in year-over-year resale declines and foresees a continuing trend of further moderation:
Sales of existing homes fell a larger-than-expected 2.6 per cent in June to a 4.86 million unit annual pace. Existing home sales have fallen 15.5 per cent from their year-ago level. While sales are still down double digits, the rate of decline has clearly moderated and we continue to believe sales will find a bottom during the second half of this year or early 2009.
Vintner also notes that sales in the most distressed markets have actually been picking up for some months now. Unfortunately, just as these regions are showing improvement, less troubled regions are begining to tumble:
The National Association of Realtors (NAR) noted that sales picked up in many parts of the country where housing is most overbuilt and foreclosures had risen dramatically, including California, Florida, Arizona, and Nevada. Sales have been rising in many of these hard hit markets for a number of months, helped out by a dramatic increase in foreclosure and short sales. Unfortunately, sales are weakening in parts of the country where sales had been holding up relatively well, including Houston, Charlotte, and Kansas City. Clearly, we are not at a bottom just yet.
What’s more, while Vintner thinks that the bottom may not be far off, this doesn’t mean that its back to business as usual. While we may hit a bottom soon, Vintner doesn’t see a return to healthy activity for many years:
There was hope that the housing market had bottomed. We continue to believe the bottom will be found in the next year but stress that any recovery beyond then will be extremely modest. Sales are not likely to return to a pace considered as strong for another two to three years.
In a report released earlier this month, Vintner predicted a 22% to 29% peak-to-trough decline in median sale price.
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