Survey Says: Housing Market Will Improve
We seem to be at the point in the housing bust where no one really knows what will happen. You have a lot of wacky ideas out there about what to do and a plethora of government programs that are meant to start a recovery or at least reduce the damage.
The upcoming November elections and the economy will both impact housing, but how so? Tough to say. The Republicans will likely gain power in the Senate, and combat that with a Democratic administration, and who knows what policies and philosophies will prevail over the next few years. Basically, we’re going to have a political tug of war (in every aspect of government, including housing), and I doubt either side will gain any traction.
No one has firm grasp on where the economy is headed. A double dip recession? Maybe. Maybe we’re already there. But it’s so confusing and there are so many opinions – and once again the political tug of war on what to do – that I think it’s almost impossible to figure out the future of the economy and what its impact will be on housing.
But the one place where I think we can formulate some sort of prediction on whether or not housing will start to improve is through the public’s perception of the current market and where it’s headed. Fannie Mae’s latest national housing survey provides a snapshot of how Americans feel about housing and what they believe will happen, which should have some correlation with where we’re actually headed.
Below are some of the results of the survey, which was conducted between June and July, and some analysis on what this means for the future.
Survey says: 47 percent believe home prices will hold steady and 31 percent believe prices will go up.
Analysis: The fact that 78 percent believe prices will not decline should be viewed as a positive sign. Part of the reason for the recovery delay has been declining property values. When people believe prices will keep falling, it’s difficult to rationalize buying now. Not only could you wait and get a better price, you’ll also own a home that’s value is declining. Why not wait until you believe prices have hit bottom and the value of what you’re buying will begin to rise? So if the public’s perception is that prices are not going to keep falling, as the survey suggests, that could mean buyers will stop waiting, and that would finally be some good news for sellers.Continued on the next page