The coming year will see the housing market stabilize and take the first steps toward recovery, one real estate expert told business leaders Friday, but another said the worst might not have passed.
Speaking at the First Friday Economic Outlook Forum in Linthicum, Lawrence Yun, chief economist for the National Association of Realtors, foresaw a year of recovery as the housing market finds a bottom.
“2008 looks to be more of a stabilizing year,” Yun said. “We went down, but at least we will not go down further.”
Yun said home-price growth nationally fell from more than 12 percent in 2005 to a decrease of 2 percent last year. Baltimore outpaced the national average, seeing more than 20 percent growth in home prices during 2005 and 2006 and gaining just a few percentage points last year.
Yun said that decline was cutting only into previous gains.
“Home prices rose 50 percent during the boom, fell two percent [last year],” he said. “It?s 50 steps forward, two steps back. You ask homeowners, are they better off than they were before, and they will say yes.”
But Anirban Basu, CEO of Sage Policy Group, said a recovery wouldn?t happen until 2009, with the full impact of skyrocket foreclosure numbers and housing inventory not yet felt.
Basu said the inventory would be cleared only by sellers lowering prices to move properties. But he said many investors would be unwilling to do so, and as prices fall they would be more likely to walk away and become delinquent on those properties.
“I don?t think we?ve seen the end of the delinquencies, so I don?t think we?ve seen the end of the foreclosures.”
Others said the housing market fluctuations would remain the primary economic weathervane for this year.
“Obviously the housing market is a big part of the indicators that we?re all looking at,” said Gary Geisel, CEO of Provident Bank. “It?s an important factor in starting 2008.”
