Will the Housing Market Ever Bounce Back?
March 10, 2011 § Leave a comment
Although the economy is slowly beginning to recover, housing prices are still declining. An article from the Wall Street Journal noted that, “Home prices fell to new lows in 11 cities in December, the latest sign that the weak housing sector remains a soft spot in the U.S. economy.” In many areas, home prices fell 1% from November to December, which raises the question, will the housing market ever be back to normal? One factor that seems to be having a negative effect on the housing market is the continued addition of numerous foreclosures to the market. According to the same article, “Economists at Capital Economics estimate that for the current level of demand, there are 850,000 too many homes for sale.” However it went on to say that many economists do believe it will recover shortly and eventually “stabilize as economic growth accelerates.”
Unfortunately for many people, the housing crash has already taken its toll. Some people have invested so much into houses that they can now barely sell to break even. Even as consumer confidence is on the rise, it makes one wonder if the economy will ever truly recover.