Economic Comments on Housing Market From UBS's David Goldberg

Housing (real property) in the United States will begin to gradually recover (read "crawl" out of the hole) in the second half of 2010 according to David Goldberg, home-building analyst for UBS, a global financial services firm. 

We thought that we would whare their 10 predictions for housing in the United States for 2010:

1. "Fundamentals will remain 'choppy' in the first half of the year, with conflicting data points making it difficult to ascertain whether we’ve actually reached the trough in housing."
2. "Headline risk, primarily driven by the government's efforts to extract itself from the mortgage market, will drive the homebuilding stocks down 15% or more from current levels…With the longer term path for fundamentals offering limited clarity, we expect the homebuilding stocks to remain quite volatile and extremely sensitive to news flow."
3. "The previous prediction notwithstanding, the government is going to do everything in its power to protect home prices...In the end; we believe that concerns about higher rates and declining mortgage market liquidity won't amount to much. In our opinion, the government continually made it clear that it is working to limit further home price declines given the serious ramifications these declines would have for both consumers and lenders."
4. "Although we forecast that as many as 7 million foreclosures are likely to occur over the next several years, we believe the pace at which these homes will come to the market will be consistent with current levels. As such, the concerns around the negative impacts of rising inventory levels are overdone."
5. "An improvement in unemployment is the single most important predictor for the longer term health of the housing market - only by focusing on this variable can we truly understand the timing for a recovery."
6. "An improving jobs picture will drive greater price stability and better demand. That said, given the level of excess inventory, the pace of price appreciation will be below trend for some time."
7. "The builders will see sequential improvements in their quarterly results."
8. "Given the limited amount of high quality, finished lots coming to market, we expect the builders to increasingly consider purchasing undeveloped parcels, which represent a greater value. This trend will be magnified if conditions start to accelerate more meaningfully in the near term as builders look to rebuild their operations over time."
9. "Although residential construction lending standards might loosen in 2010, liquidity will be insufficient to drive starts toward current consensus estimates."
10. "The longer term outlook for housing will increasingly dominate investors focus toward the end of 2010."

Comments

[James from Homebuilding Questions]

I am optimistic to hear this news. Visitors to my site are constantly asking questions relevant to construction loans and site selection options.

I see an upswing in development of new parcels in our Midwestern market.

[Nashville Mortgage]

Amen and Amen to #5 and #6. We'll have no real recovery in housing until we have real recovery in employment.

[St Louis Mortgage - Floyd]

I'm afraid I cannot see the housing industry coming out of this defunct state or even getting better in 2010. I say this due to what has happened to the St Louis mortgage market.

I agree that unemployment has to go down for any recovery to truly begin. But this nation's home values that have plummeted due to foreclosures and the alarming amounts of vacancy, will most likely not see those values return for several years. In fact, it may even take 2014 to 2016 before they are at par.

The good news is that the commercial sector may not be hit as hard as originally expected which I think will help the recovery along for the business sector as far creating new jobs and possible expansion which is music to my ears.

[32808 Homes]

I don't know anyone who is not getting paid by the real estate industry who thinks we will recover anytime soon.
Any rational thinker should believe we are in for 5 to 10 years of sideways home prices after another 6 months of declining prices.

I am a realtor and more importantly an investor in Florida and we will recover faster, but have further to go still.

[HowMuchHomeCanIAfford.org]

Thanks to prediction number 2. Now the mortgage field can resume to a normal lending as before.

Thanks
Collin paul
http://www.howmuchhomecaniafford.org/