A housing recovery in 2011? Experts are divided
Original Post Date: November 28, 2010
By: Mary Umberger
Optimists, pessimists and Ferraris — a compendium of real estate musings:
• Wait till next year. Or 2012. You probably shouldn’t set your heart on any significant housing recovery in 2011, Yale University economics professor Robert Shiller said.
That’s not his prediction; it’s the consensus of 109 economists, analysts and real estate experts surveyed by his financial technology firm, MacroMarkets. His panel in October was roughly evenly split between “recovery optimists,” who expect market improvement next year, and “recovery pessimists,” who don’t see a rebound coming until 2012 or later.
The optimists (Shiller isn’t one of them) predicted that home prices would increase 14% overall by 2014. If you’re looking for housing encouragement, you probably ought to stop reading, because the pessimists expect price growth of, at most, a puny 3% in that same period.
Their blended viewpoint, however, does see prices nationwide increasing 8% by 2014, or a little more than 2% annually. Not exactly the basis for handsprings, though better than some alternative scenarios.
Shiller is well known in economic circles for having called the Internet stock crash and the housing bubble long before they happened in addition to being a namesake of the widely reported Standard & Poor’s/Case-Shiller home price index. He told Kiplinger’s Personal Finance magazine recently that future mortgages ought to have “workout” wording written into them that would allow greater flexibility in modifying the loan terms to avoid foreclosure for borrowers experiencing financial hardship.
• Home buyer, start your engine. Around 2006, when the market was starting to sag, there was no shortage of homes for sale whose owners were offering to throw in a car to sweeten the deal. I remember the full automotive range, from Mini Coopers to Hummers. The cars didn’t seem to be particularly effective incentives, agents said, and they fell off the marketing map.
But Ferrari lovers, don’t give up hope: Maybe you’d just like to pretend that you own one. The owner of a Colleyville, Texas, mansion, who hopes to lease the place out the week of the 2011 Super Bowl in nearby Arlington in February, will let the renter tool around in his Ferrari F430 (or his Lamborghini Gallardo or Maserati Quattroporte) for an additional fee. The house is $45,000 for the week — or you could buy it for $2.8 million, according to the Fort Worth Star-Telegram.