Have Home Prices Finally Reached Bottom?
“Prices are bottoming now,” according to a Bank of America Merrill Lynch forecast, released this week.
In the fall, the analysts had predicted home prices would drop by 8 percent from the second quarter of 2011 through the first quarter of 2013 — but now they’re revising that forecast, realizing the housing market is stabilizing faster than they originally thought.
The analysts now predict that prices will remain flat for the next two years, as the excess foreclosure inventory is absorbed. They then expect to see a pickup in home prices by 2014.
And in the long-term, they see a big rise in housing prices. From 2012 through 2020, analysts forecast a cumulative growth of 42 percent in home prices (at 4 percent on an annualized basis).
Comment
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Comment by Ryan E on March 26, 2012 at 3:06pm -
Here in one of the hardest hit markets in the US (Reno, NV) the market is not only hitting bottom many price ranges are on the rise. We will see if it can be sustained, I believe it can. Buyers can buy houses here at a 15-20 year discount, for much less than construction/replacement costs. Those conditions will not last long.
We are still seeing weakness in the 300K to 1mil. Market.
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Comment by Hugh Swanson on March 26, 2012 at 12:47pm
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I'm in Orange County, California, and the market has always varied from community to community. If a buyer is looking for a place to live, there's never been a better opportunity. Or he can just wait for that "perfect" moment and compete with multiple offers for a home that is his second choice at an interest rate that doesn't meet his expectations. And that's why this business is so much fun.
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Comment by Elie Morris on March 26, 2012 at 12:29pm -
Anyone who listens to anything Bank Of American says, needs to get their head examined. Amongst the biggest liars out there. How soon we forget.
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Comment by Glen Hagen on March 26, 2012 at 11:02am -
I guess this depends upon where one lives. In New York State where foreclosures take longer than any of the 50 states, a recovery will be pushed that much further down the road. In addition, Robert Schiller was on CNBC this morning and said it was premature to say we've hit bottom. Case-Schiller's home prices are out tomorrow... Let's see what the facts indicate.
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Comment by Robert Allen Laird on March 26, 2012 at 10:35am -
Yes, i have been expressing those same ideas and that I personally believe that 2013 will be a difficult year and the results of the November election will alter the pace of the very anemic "jobless" recovery.
As interest rates start rising to where they should be, then that will cause the "fear factor" to take place and motivate people to buy.
NAR News
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