By Julie Schmit, USA TODAY
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.
As foreclosures pick up this year, “prices will drop,” says Stan Humphries, Zillow chief economist. He says home prices won’t bottom until later in 2012 or next year.
On average, prices have fallen by about a third since 2006.
Commentary from Bob Karp of Karp Properties: “We have finally reached the bottom”, well we have heard that refrain before about the housing market. But most indicators, including local conditions in the Sierra Vista Arizona area seem to indicate an uptick in market activity. In fact, some homes coming on the market have higher price per square foot numbers than have been seen in the last three or four years. However, location, condition, and features drive better prices. It’s too early to tell if this trend will continue, but in our office January has started the year off very strong.