What's in store for real estate in the Bay Area for the coming year? Most in the real estate industry agree that it will get worse before it gets better. However, predictions vary among our "experts." What are we in store for in 2008? When will prices begin to recover? Hear what some of them are saying.

"Don't count on market rebounding in '08, experts say." - Marni Leff Kottle of the San Francisco Chronicle.

"A real recovery in the housing market is probably at least a year off," said Robert Kleinhenz, deputy chief economist for the California Association of Realtors.

California Association of Realtors's forecast for 2008; sales volume will continue to fall, 9% in 2008, as will the median price of a home, at 4%. Take a look at the 2008 California Housing Market Forecast presentation by Leslie Appleton-Young, Vice President and Chief Economist for the California Association of REALTORS® (C.A.R.).

"The best guesstimate most can come up with these days on a residential housing recovery is that 2008 will be more than half over before housing prices even stabilize. Right now, it's anybody's guess as to when they will start to grow positively." - Ryan Fuhrmann, an article printed in The Motley Fool.


It may take until the end of 2008 or beginning of 2009 for the market to hit bottom, said Mark Zandi, chief economist at Moody's Economy.com.

"But the one thing that economists and real estate agents seem to agree on is this: As bad as it may get in the Bay Area, the region is weathering the downturn in the real estate market much better than most other places."

"The housing market is fairly strong in the vast majority of the Bay Area," said Ken Rosen, chairman of the Fisher Center for Real Estate at UC Berkeley. "It's slipping a little, but it's not the free fall you have in some parts of the country."

"When you look at the rest of the state and even the rest of the country, the Bay Area has held up quite well," said Larry Klapow, president of Coldwell Banker's San Francisco Bay Area region. "The market has shown incredible resiliency." - "So Long, '07"

"Builder's expect recovery in second half" - Jessica Saunders, East Bay Business Times.

"At least two builders expect to see some recovery in the East Bay housing market in the second half of 2008, but another expert thinks it will be 2009 before demand and supply balance out."

"Once we get through the credit crunch, and buyers realize the world didn't end, they will come back," said Scott Menard, SummerHill Homes' chief operating officer, who predicts the market will continue down through at least the first quarter. "Next year will probably be a bit of an adjustment year."

Which brings us to the question; Will 2008 be a good time to invest in real estate? See what a recent survey showed taken by the East Bay Business Times. 60% say that now is a good time to buy! Read their comments as to why.

Labels: Bay Area Real Estate, CAR, East Bay Business Times, Fisher Center for Real Estate, Ken Rosen, Moody's Economy, Real Estate Cycles, San Francisco Chronicle, The Motley Fool

After Disappointing 2006, U.S. Real Estate Market Expected to Stagnate in 2007.
By Rachel Konrad, AP Business Writer

"Although few experts predict that home values will fall dramatically in 2007, many economists say that prices won't improve for 12 to 18 months. And without the cushion of rising home equity -- which softened the blow of high oil prices last year and kept consumers buying big-ticket items at a rapid clip -- Americans may lose confidence in their finances, and the broader economy is likely to suffer."

"Ambitious building booms in many markets in the past half-decade, combined with mortgage interest rates that have increased about 1 percent in the past year, have resulted in residential real estate stagnation. The gridlock defies conventional wisdom, stubbornly remaining neither a buyer's nor a seller's market."

"We are currently experiencing the worst of the market freeze, which is being exacerbated by the gap between the buyer's desire for bargains and the seller's fantasy of what they once thought their homes would be worth," said Diane Swonk, chief economist for Chicago-based Mesirow Financial, who forecasts a rebound in early 2008. "The good news is that there are some signs of stabilization. The bad news is that a substantial backlog of unsold homes still exists."

"The newest forecast by Moody's Economy.com, a private research firm, projected that the median sales price for an existing home will decline in 2007 by 3.6 percent -- the first decline for an entire year in U.S. home prices since the Great Depression of the 1930s."

"Areas along the coast of the nation and the large urban areas tend to see stronger price gains in housing upturns, and stronger declines in downturns," said Celia Chen, a housing economist with Moody's Economy.com in West Chester, Pa.

"We have to work off the inventory," said Daniel Nussbaum, a licensed investment adviser and CEO of Calabasas-based TheUSARealty.com. "I honestly think we're past the worst of it, but if you don't take out your magnifying glass you might not notice."

"It's definitely a friendlier market than earlier this year, but not a dramatically cheaper one," Zach Chouteau, 41, said. "People have gotten really spoiled by the rapidly escalating prices, and it seems like they're in denial that things have leveled out. They're just fishing for the best price."

Labels: Bay Area Real Estate, Housing Inventory, Housing Market, Moody's Economy, Rachel Konrad, Real Estate Cycles