While some point to the possibility that home prices and sales may once more turn down, the reality is that housing isn’t entering a double-dip; it’s merely continuing its journey. Homeowners or potential home buyers want to know what’s really happening; but the news is so confusing that it’s virtually impossible to tell. For many the confusion arises from the surge in sales and prices that began last fall and continued into the spring, a time when economists and pundits were quick to call the housing bottom.
● Jim Cramer even set the specific date for the bottom, June 30, 2009, telling consumers to go out and buy.
● Alan Greenspan agreed and said housing would bottom by the middle of 2009.
● Housing Predictor said that most of the market would see bottom between April and June of 2009.
● Moody’s put the date a bit further out, guessing Q-3.
● Money Magazine said to wait until the end of that year.
● Late in 2009, the NY Daily News gushed with optimism, “Home prices are nearing the end of a three-year slump and should rise in 2010.” They based their prediction on the polling of forty-one economists, with all but one agreeing that a bottom had been reached or would be reached within a year.
Many of the positive predictions came about as a result of the Housing Tax Credit, which, in some areas created a buying frenzy with happy sellers raising prices to compensate for the government’s gift.
More recently however, negative voices have been predicting a “double dip” for the housing market. It’s no wonder that buyers are sitting on the sidelines or that sellers are either elated because “home prices are rising,” or depressed because of the coming “double dip. On Wednesday, an article on HousingWire stated, “Housing’s double dip is here.
However, I don’t believe we’re entering a “double dip,” for housing never truly reached a bottom. The anticipated stabilization that was to be created by the multitude of recent government programs never materialized. The additional sales and price increases that resulted from the Tax Credit was artificial and failed to provide the predicted results, doing nothing more than shuffling the year’s sales numbers, while costing taxpayers billions. There was no wave of “new” buyers, for only a miniscule number of permanent renters were enticed to become homeowners. No, we need not fear a double-dip; the housing crisis that began in most areas in 2007 is still going strong, and a comparison of the annual sales numbers will quickly point that out.
Certainly we can find comfort if “our” area is doing okay, but the bulk of the country is far from okay. However, buyers and sellers shouldn’t be fearful of this news of a “double dip,” as if there is some new villainy set to prey on housing. The market is merely continuing the process of being re-defined, a process that includes lots of ups and downs. And while no one can be certain of the ultimate outcome, those who pounce on this latest prediction de jour will remain as confused as ever.
The Housing Guru: The expert source for all your housing questions