In the May 1 issue of the Wall Street Journal, June Fletcher looked into her crystal ball and wrote "Don't look for the housing market to improve until the daffodils bloom next spring. The latest S&P/Case-Shiller Home Price Index shows that new and existing home prices fell 12.7% in February from a year earlier, and according to economists who convened at the spring construction forecast conference of the National Association of Home Builders in Washington, D.C., last week, the trend will continue until early next year, dragging down prices. The consensus view was far gloomier than a few months ago, when housing economists predicted the bottom would be reached in late summer or early fall."
Then, just a few days later on May 6, Cyril Moulle-Berteaux wrote an article in the same paper, headed: "The Housing Crisis Is Over."
He started off with "The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now." His logic is that the current housing bust is already three years old, and that homes on average are back to being as affordable as during the best of times in the 1990s. Numerous households that had been priced out of the market can now afford to get in. The next question is: Even if home sales pick up, how can home prices stop falling with so many houses vacant and unsold? The flip but true answer: because they always do."
Who do we believe? This summer's sales could well be the test, but either pundit would agree that the turnaround will be slow in coming.
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