U.S. Housing Recovery in 2010?

Courtesy of Bloomberg: "U.S. Housing Recovery Delayed to 2010 as Market Wanes" -- Housing quotes and predictions from some of the biggest players and analyst in the industry.

I don't think the housing crisis is over," Mark Zandi, chief economist with Moody's Economy.com

New home sales may begin to pick up by the start of the so-called spring selling season, said Toll Brothers Inc., the largest U.S. luxury homebuilder. Existing house sales may take longer.

Residential construction and property sales led the way out of the previous seven recessions going back to 1960, said David Berson, chief economist of PMI Group, the mortgage insurer in Walnut Creek, California.

"Market conditions in the homebuilding industry are still challenging, characterized by rising foreclosures, high inventory levels of available homes, increasing unemployment, tight credit for homebuyers and weak consumer confidence," said Donald R. Horton, chairman of D.R. Horton Inc., the nation's second-largest homebuilder.

The jobless rate probably will peak at 10.4 percent in 2010's first quarter, even as the U.S. economy continues an expansion that began in the third quarter, said Douglas Duncan, chief economist of Fannie Mae, the largest mortgage financier.

"You don't pay a mortgage with economic output -- you pay a mortgage with a paycheck," Jay Brinkmann, MBA's chief economist, said yesterday.

There are signs that parts of the U.S. are rebounding. California, among the states where the housing bust started, is one of the few areas that's beginning to recover.

October home prices in Orange County, San Diego and the San Francisco Bay Area increased from a year earlier, MDA DataQuick, a San Diego property information service, said this week. The number of sales also increased in the Bay Area and Southern California.

"We have to be aware that the stabilization that we've seen so far is tenuous at best," Lennar Corp. Chief Executive Stuart A. Miller said Nov. 17 at a conference in New York sponsored by UBS AG.

Homebuilders and investors will get a better gauge of whether housing demand is stabilizing in 2010's first quarter, said Robert Toll, chairman and chief executive officer of Toll Brothers, the largest builder of luxury houses.

"My prediction is we'll probably recover on a seasonal basis," Toll said yesterday at a conference in New York sponsored by Citigroup Inc. "It's generally accepted that the homebuilding industry is off the mat and on the road to recovery."

"The first-time homebuyer tax credit juiced up sales," said Moody's Zandi. "The stimulus was helpful. It augurs, at the very least, that policy makers can't pull life support from housing."

Josh Levin, a housing analyst at Citigroup Global Markets Inc. in New York, said he expects sales to continue to be slow until January or early February, followed by a surge as buyers try to beat the April 30 expiration of the tax credit.

"The bouncing along the bottom is distorted by government policies," he said in an interview yesterday.

Foreclosures will also have limited impact on driving down real estate prices as long as banks are slow to put properties on the market and the government encourages loan modification programs, he said.

"It's clear the government and banks don't want to flood the market with foreclosed homes and it's clear it's going to be dragged out," he said.

Where do you see the housing market going in 2010? Do you think your local market is on the bottom poised for a strong recovery?