Housing Rebound: Have We Hit Bottom Yet?
Monday, August 10th, 2009While this will eventually be known as one of the worse housing recessions in our history and there are indications that the housing market beginning to stabilize, it is hard to tell if we’ve hit rock bottom yet. Dean Baker of the Center for Economic and Policy Research says, “The freefall is over.” That said, the expectation is that the market will continue to hang out here ‘at the bottom’ for several more months, possibly into early next year.
Unemployment is steadily increasing and expected to go over 10% nationwide, it’s pushing 15% in some states already, and it will be difficult for the housing market to truly settle if people continue to struggle to make their mortgages or are unable to due to lack of income from job loss.
Currently short sales are on the rise and could increase as more homeowners find themselves with poor job prospects after layoffs. Massive layoffs at Bank of America and Wachovia in their home state of North Carolina has taken a serious toll on the housing market in and around the Charlotte area. Florida, already suffering from one of the highest foreclosure rates in the country, suffered yet another blow last week when mortgage giant Taylor Bean Whitaker closed its doors for good. Approximately 1000 employees were suddenly out of work.
The problem about knowing if you’ve reached the bottom is—you only know for certain you were there once you’ve started to climb up on the other side. It may be a while before we can confidently look over our shoulders and say, yep, that was the bottom!