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Tuesday, January 20, 2009

National Association of Home Builders: Prices to Fall 29% in 2009

by Calculated Risk on 1/20/2009 10:28:00 PM

The building industry trade show started today in Las Vegas. The Las Vegas Review Journal has some details: Economists say housing market to remain unstable

David Crowe of the National Association of Home Builders said he was quite negative in his housing and economic outlook last year, but not negative enough.
"We have consumer confidence at or near a historic low," the economist said Tuesday at the building industry trade show, "and it will probably deteriorate in 2009."

The S&P/Case-Shiller Home Price Index fell 25.3 percent from March 2006 to October 2008.

Crowe said he expects prices to fall another 29 percent this year and new home sales to decline 14 percent.

... The nation has an excess "overhang" of 6.2 million homes for sale, about 1.5 million too many, he said.
There are negative comments from other economists in the article too.

The WSJ has more: Builders Predict More Housing Pain
Economists from Freddie Mac, the government-backed lending agency, mortgage insurer PMI Group Inc. and the Portland Cement Association trade group also predicted this year would be worse than 2008 in terms of starts and overall housing activity.
Frank Nothaft, chief economist for Freddie Mac, predicted the U.S. unemployment rate will jump to 8.7% by the fourth quarter of 2009 from 7.2% as of December.
The Portland Cement Association held a separate news conference Tuesday at which its chief economist sounded even more pessimistic about prospects for a recovery. "I see another full two years almost before a significant gain," said Mr. Sullivan, who was one of the first industry economists to predict the current downturn.
Grim and grimmer. Must be a fun convention.