Housing Slump Saga Continues
On the topic of buying my own place, it has always been my thought to wait until half way through next year to make a decision on buying. This MSN Money article, House prices expected to fall until 2009, reaffirms it for me.
“It’s going to be a long time before we see it bottom out and recover,” said David Lowman, chief executive of JPMorgan Chase’s Global Mortgage unit. “There’s too much inventory already in the marketplace.”
Lowman and the three other participants in a round-table session before most of the convention’s 4,000 participants differed slightly on the size of price declines still upcoming, but they agreed no price recovery is likely until at least 2009.
“I think this year we will see a 2% decline in national home prices, and we’re projecting about a 4% decline next year,” said Thomas Lund, an executive vice president at Fannie Mae.
Prices likely will flatten in 2009, Lund said, before gradually rising.
Lowman said it might be 2010 before the price decline ends.
This is not hard to imagine, because it is only since last year 2006 that the rate has begun to reset for many home buyers with ARM. Those ARMs are borrowed on a fixed rate for either 3-year or 5-year for many people spreaded over time. Hence, it is not difficult to imagine that as many more of those ARMs’ rates get reset in the coming years, there will be more defaults and foreclosures following. Together with an already over-supplied market, housing price is bound to drop further
So honestly speaking, who knows when the housing market is going to bottom out? Nonetheless, that is my vision and what I believe. That is the reason why I am waiting until next year to get a better perspective before making a decision to jump into home-ownership.
There is no hurry because while I wait,I will continue to put my money to work in some high-yield saving accounts and stocks/funds investment.
Originally posted 2007-10-27 13:08:41. Republished by Blog Post Promoter