The U.S. housing market is in a slow recovery stage, and Americans should not expect a robust comeback in 2013, according to real estate journalist Ilyce Glink.
Prolonged wrangling in Washington over debt limits and spending could still have a negative effect, but, failing that, this year should produce “mixed results,” Glink wrote in an article for CBS MoneyWatch.
The primary factors affecting the market — up or down — in 2013, she noted, will be more foreclosures, slow price growth in various markets, more regulations and low interest rates.
Editor's Note: Unthinkable Haunts Investors: Evidence for Imminent 90% Stock Market Drop.
A “housing depression” will persist through the year, Glink wrote, noting that new home sales are still almost 80 percent below their peak, and home prices are still down at least 25 percent from the highs.
In addition, foreclosures will continue to be a drag on the market, as banks will be forced to put their inventory of foreclosed homes up for sales or auction.
One bright spot, she said, was that interest rates would stay low through 2013 and “probably” through 2014. On the other hand, strict lending standards are likely to continue, making it hard for some would-be buyers to obtain a mortgage.
More regulatory action is also on the horizon in 2013, Glink wrote, including more government litigation about bank foreclosure practices, and up to $300 billion in new bank fines, fees and settlements against lenders.
Finally, Glink expects buyers to still hold out for lower prices from sellers and that short sales and loan modifications would continue to increase.
However, some experts are more optimistic for the 2013 housing market. Sales of existing homes will rise about 7.2 percent in 2013 to 4.98 million, the highest since 2007, according to 15 economists and housing analysts surveyed by Bloomberg, and prices will gain 3.3 percent after an estimated 4.5 percent jump in 2012.
The Bloomberg survey predicted purchases of new single-family houses will jump 23 percent to 448,000 this year, continuing last year’s rebound from a record low 306,000 in 2011.
“We expect housing to continue this momentum into 2013 and in fact show stronger growth rates due to pent-up demand,” said Mark Kiesel, managing director at fund giant Pimco.
Editor's Note: Unthinkable Haunts Investors: Evidence for Imminent 90% Stock Market Drop.
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