The International Builder's Show is being held in Orlando this week, and it doesn't look extraordinarily bright for this year (which is already 10% complete - can you believe it?). From the Palm-Beach Herald,
' ORLANDO — The real estate market hasn't hit bottom yet, three of the nation's top housing economists told the world's largest building trade show Wednesday.
Always one of the International Builders Show's highlights, the annual economic forecast has featured the same trio of top housing analysts for the past few years: David Seiders, chief economist for the National Association of Home Builders; and David Berson and Frank Nothaft, chief economists for mortgage giants Fannie Mae and Freddie Mac, respectively.
But this year's highly anticipated message was a sobering one: Home prices will continue to slide for the rest of 2007, Berson said. Still, he said the biggest price drops probably are over.
Nothaft predicted that the housing market will hit bottom the first half of this year, with a gradual improvement in the second half that will continue through 2008.'
I don't agree with the last statement - first it's still too far off for such a prediction. 2nd, in addition to the record # of homes for sale right now, 2.1 million of them are empty. Third, the REIC is experiencing record layoffs and job freezes - that's an entire segment of the economy that is shrivelling up faster by the day. Fourth, a trillion $ in mortgages are being reset this year, with record foreclosures expected. Add these facts, and it becomes intuitively obvious that a quick turn-around is not happening this year.
'"We're not at the trough yet for single-family home sales," Nothaft said, noting that home prices will have to fall further to burn through the current high levels of housing inventory. "We are still a few years away from obtaining the robust activity of 2005."
A few years? Maybe if you define "a few years" = "5-10 years".
That's not what the more than 100,000 home builders, Realtors and other industry representatives attending the four-day show at the Orange County Convention Center wanted to hear. But most acknowledge that today's near-record level of homes follows a five-year run-up in home prices, fueled by low mortgage rates and investor dollars.
Nowhere was that more true than in Palm Beach County and the Treasure Coast. The median price of an existing single-family home in Palm Beach County soared to a peak of $421,500 in November 2005, plunged to $365,600 in October 2006 and ended the year at $368,200, according to the Florida Association of Realtors.'
And then this little gem about South Florida,
'But even as the housing market continues its slide this year, Palm Beach County and the rest of South Florida will fare better than other parts of the country, Berson said.
"You have a very large contingent of foreign investors from Europe and Latin America, and their goals are different," Berson said after his presentation on the economic panel.
"They invested as a way to hedge where they keep their money," Berson said. "If there's price weakness, they may not pull out as fast as domestic investors who are looking only for a good return."'
In other words, these foreign investors won't sell cheap, and that'll prop up the prices? Errrrrrrr.....!