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The end of the housing crisis in the U.S. is not close |
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Saturday, 25 October 2008 |
Falling housing prices in the U.S. will continue its decline next year, and an eventual recovery in 2010 will be, at best "modest". This shows the results of a Reuters poll conducted among economists.
However, prices are expected to slow down the pace of reduction in 2009 as the three-year crisis has already attracted some customers in regions with greater price reductions as Florida and California.
The value of housing will be reduced by 15 percent in 2008 and 6.4 percent next year, the poll shows.
Since the beginning of the year to July prices have already reported a fall of 16.3 percent, according to the index Standard & Poor's / Case-Shiller.
By comparison, even last year still had many economists, who shared the view that prices will not decrease at all.
Now some of them expect any significant recovery in the foreseeable future, especially against a backdrop of slowing economic conditions and extremely raw lending.
"Continued growth in the number of homes taken from the banks might maintain downward pressure on housing prices ," said Kevin Logan, chief economist at Dresdner Kleinwort.
"What pull prices down is excessive inventory of homes for sale and restricted credit terms," he says.
Government sources are considering a plan to provide safeguards for problem mortgages in an attempt creditors have an incentive to change conditions on them and delay are rising wave of stolen homes.
Expectations, which become more controversial show how difficult it becomes dark enough science now to prepare economic forecasts, says the publication.
For example expectations poll for the general decline in prices from their peak until the reach the bottom, ranging from 17 percent to 64.8 percent.
Some of this uncertainty is rooted in fragile state of credit markets. The majority of participants in the poll were told that to find the level of housing prices is a major prerequisite for the end of the worst credit crisis in decades.
This housing to reach its bottom at the end of 2009, however, depends to a large extent how severe will be affected the entire economy of the country.
On the other hand, analysts warn that the market for commercial properties in the U.S. may yet to begin its decreasing trend.
Analysts JP Morgan Chase Alan Todd said the value of business property can be reduced by 20 percent from its peak, as options for funding are limited by the credit crisis and creditors expect a higher return. |
Real Estates 
