Home prices continue to tumble, and have further to go to get back to pre-bubble levels, according to the bears. Another wave of foreclosure is coming down the pike, especially as another big slug of Alt-A mortgages start resetting to higher rates in 2010 and 2011. Plus, inventories remain elevated and now rising mortgage are putting a crimp in refinancing activity.
But Jeff Matthews, founder of Ram Partners takes a variant view: “What’s happening in the real world is this: the housing market is recovering, fast,” the fund manager recently wrote on his blog.
Matthews’ optimism on housing is based on the following factors, as discussed in the accompanying video:
• The inventory of unsold homes is coming down rapidly from the peak levels of last year. Hovnanian has even sited shortages in some previously saturated markets, Matthews notes.
• Housing affordability has improved dramatically from its all-time low levels in recent years.
• Buyers are emerging and markets are “clearing” in some of the hardest-hit areas, like Phoenix, Sacramento and Las Vegas. Don’t dismiss these buyers as mere speculators looking to get back what they lost in 2008, Matthews says.
•
The current bottoming process may, indeed, prove to be the proverbial eye of the housing hurricane when all is said and done, Matthews says. Still, he believes it’s a mistake to dismiss the improvements and says too many observers are busy looking in the rearview mirror vs. focusing on the reality in front of them.
Related Posts
- We’re entering a brutal new era for the housing market
- Housing market predictions: The forecast for the next 5 years
- The US housing market is set to cool this fall, setting up a rare opportunity for buyers as sellers slash prices, Zillow says
- Home prices could jump 5% in the next 12 months as high mortgage rates freeze the housing market, Zillow economists say
Lots of of guys blog about this subject but you wrote down some true words.