Optimism is building that the housing industry is nearing a bottom — finally.
Home sales and home building are forecast to rise this year after sliding steeply the past five years in housing’s worst downturn since the Great Depression.
Recovery is expected to be slow, and home prices are widely expected to fall this year. But investors are betting on the start of an upturn, bidding up home builder stocks and causing them to outperform the broader stock market.
Chief executives are more positive. JPMorgan Chase’s Jamie Dimon said last week that housing is near its bottom but could stay there a year. Stuart Miller, CEO of home builder Lennar, said the market has started to stabilize because of low prices and record-low interest rates.
Many economists expect home prices to fall more this year because of foreclosures and other properties sold at very low prices.
As foreclosures pick up this year, “prices will drop,” says Stan Humphries, Zillow chief economist. He says home prices won’t bottom until later in 2012 or next year.
The good news? Consensus has it that we are probably sloshing around in the mud at the bottom of the lake… The end is near.
From USA Today News, Julie Schmit, Jan. 15, 2012