The Housing Crisis is Over
May 15, 2008 – 1:43 pmIt appears that I’m not alone in my opinions about our housing market. In his recent Wall Street Journal article, Cyril Moulle-Berteaux announced that “the housing crisis is over”.
Given the worldwide tone of gloom and doom that I referenced in a previous blog, you may be asking yourself if Moulle-Berteaux is either joking or just a wee bit crazy. I, on the other hand, say he’s right on the money (forgive the pun).
Now don’t get either Cyril or me wrong. We’ve seen some pressures on the market that have been concerning. But the fact is, these are natural-albeit drastic at times-market corrections. Before the so-called “burst”, prices were climbing so high so fast that the folks who looked at buying a home as a place to live, and not as an investment, could no longer afford to purchase.
The market has now been moving downward for about three years. Speculators-many of whom were in over their heads-have moved out of the market either voluntarily or otherwise. This has left a number of existing homes on the market. The prices on those homes have lowered and the market for them has begun to stabilize, meaning that it’s a prime opportunity for first-time homebuyers in particular to buy.
Now, are we going to see the same kind of phenomenal growth in the next couple of years that we saw in the late 90s and up until a couple of years ago? It’s not likely. But do I believe that long-term growth is likely? Absolutely. It happened in the 1970s (a period I’d rather not admit I remember), the 1980s and the 1990s. And I anticipate that it will happen again.
