Great, buy now!
I don’t know how I missed this.
Last week, Economy.com was out with a new study, saying that median house prices are likely to decline more than 10% over the next few years in 20 metro areas, including Las Vegas, Tucson, Ariz., and Washington, D.C.
According to The Wall Street Journal Online:
The report, by Moody’s Economy.com Inc., a research firm in West Chester, Pa., also says that the slump won’t end quickly. Indeed, according to the report, prices may keep falling until 2008 or even 2009 in some areas. In all, prices are falling or likely to decline soon in about 100 metro areas, the firm says.
I skimmed through articles about this, last week, but didn’t pay too much attention, past the headline saying prices would drop.
Apparently, there is more to it, than that.
According to Economy.com’s chief economist, Mark Zandi, the home sales market in Boston has already hit its bottom.
According to Business Week:
Zandi thinks that the worst is over [in Boston]. He estimates that prices declined 2.2% in the second and third quarter of 2006, and that should be the end of the meaningful declines. “Boston’s jobs market is coming back, and the city didn’t see much froth anyway,” says Zandi.
Business Week says there are others who disagree with his assessment; the Chicago Mercantile Exchange runs a housing futures exchange, and the CME expects Boston to continue to drop, at least 7% by August, 2007.
The CME futures market is very thinly traded. They only started trading futures a few months ago, and only cover housing prices in 10 markets across the U.S. I think the market is useless, in fact, at least as of now.
Very interesting data. What I would say is, if people are going to quote Economy.com’s forecast, as fact, then they have to accept everything in the report. If you feel that home prices will fall, based on this report, than you also have to believe Boston’s prices won’t fall. You can’t pick and choose.
Source: Prices in 100 U.S. Cities Expected To Decline for Next Few Years – By James R. Hagerty and Anjali Athavaley, The Wall Street Journal Online
Source: Where Housing Prices Will Fall Most – By Pallavi Gogoi, Business Week