Have We Hit the Bottom with Home Prices?

My daughter, the economist, tells me was are in a New Economy.  I believe her, because we have suffered so many ups and downs with this recession and “recovery“, perhaps the only way to describe this is an New Economy.

According to the traditional economic parameters, the “recession” ended in June of 2009.  That was three years ago and no one I know believes the recession ended then for them.  In perfect “economic terms” that may seem true, but the lingering damage continues today.

It will not be possible to have a sustained recovery until the housing market, including new construction, is on solid ground.  We “cheer” when we read a report in the newspapers that tells us today “Pending Sales in June are up 29%”, but in the next breath, “Month to month pending home sales are DOWN 3%”.  The bad economic news about lack of  job growth, significant slow down in China, and the European financial meltdown continue to affect the sentiment and confidence in the US.

Serious financial minds believe our country is in a better place than the rest of the world, but we will continue to be affected by the global economy.  The Wall Street Journal makes a case that the housing bust is over, but they also acknowledge that “The biggest threat is a large shadow inventory of unsold homes, homes which owners won’t put on the market because they are underwater, homes that will be foreclosed eventually and homes owned by lenders.

We grasp at straws.  While it may be tempting to say home prices have bottomed out, HIS Global Insight’s Patrick Newport warns it is, “premature to do so.  The most likely scenario, in our view, is that home prices will zigzag over the coming months, rising during the selling season, slipping in the fall.”  He feels that home prices may start to move up cautiously in 2013.

Alternatively, if you want to refinance, the timing could not be better, and there is even help for folks with less equity than their mortgages.  Call us and we can help.  It is also a good time to buy, because interest rates have never been better, and we will get through this very difficult time.

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