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Friday, November 20, 2009

A Few House Price Forecasts

by Calculated Risk on 11/20/2009 08:55:00 AM

From housing consultant Ivy Zelman commenting on the MBA Delinquency report in the NY Times U.S. Mortgage Delinquencies Reach a Record High

"I’ve been pretty bearish on this big ugly pig stuck in the python and this cements my view that home prices are going back down."
From Bloomberg: Housing Recovery in U.S. Set Back to 2010 as Market Wanes
“I don’t think the housing crisis is over,” Mark Zandi, chief economist with Moody’s, said in a telephone interview. “I think we’re going to see another leg down.”
From Goldman Sachs chief economist Jan Hatzius in a note to clients: A Renewed Sag in the Housing Market (no link)
"Our current working assumption is a 5%-10% drop in home prices through the middle of 2010. ... house prices and credit quality ... to weigh on the US financial system, the availability of bank credit, and ultimately the pace of the economic recovery."
My view is that house prices might have bottomed in some non-bubble areas, and also in some low end bubble areas with high foreclosure rates, however I expect further price decline in many mid-to-high end bubble areas.