Not a day goes by, or so it seems, without someone writing another upbeat article about the U.S. housing market in 2012 (a refrain that has been heard at least a few other times before since the housing bubble burst a half-decade ago) and today’s entry comes via this story in USA Today that cites all the usual factors.
Optimism is building that the housing industry is nearing a bottom — finally.
Home sales and home building are forecast to rise this year after sliding steeply the past five years in housing’s worst downturn since the Great Depression.
Recovery is expected to be slow, and home prices are widely expected to fall this year. But investors are betting on the start of an upturn, bidding up home builder stocks and causing them to outperform the broader stock market.
Chief executives are more positive. JPMorgan Chase’s Jamie Dimon said last week that housing is near its bottom but could stay there a year. Stuart Miller, CEO of home builder Lennar, said the market has started to stabilize because of low prices and record-low interest rates.
Market researcher RBC Capital Markets has also turned from a “bearish” view on housing to saying that 2012 “will mark a step in the right direction.”
To me, one of the more surprising turnarounds came last week when the Orange County Register reported that early housing bubble-spotter Christopher Thornberg (those of you were around back in 2005-2006 should recognize the name) turned from bear to bull.
While home prices will probably continue to fall early in the year as the foreclosure pipeline begins to empty into the market again, there are still opportunities for the best mortgages since the Eisenhower Administration and, given all the optimistic press reports in the New Year, buyers just might decide to return.
Of course, that’s the best case scenario and, given the disappointment seen in the U.S. and global economy in recent years, not something one should count on.