Every since Robert Toll gave his famous “dancing on the bottom” comment about housing back in 2006, we’ve seen hundreds of articles with sunny predictions of green shoots and market bottoms. You’d think the media would cease to print them, but bottom articles remain a staple of real estate reports. Yesterday Reuters proclaimed Home prices close to bottoming, to rise in 2013. They at least decided to sound somewhat dubious about it: [Thanks L!]
(Reuters) – The relentless decline in home prices is nearing an end and prices should rise for the first time in seven years in 2013, but a possible new wave of foreclosures could threaten the recovery, according a Reuters poll of economists.
Usually “bottom” articles bury potential caveats down near the bottom of the article, so I suppose reporters are learning something. It’s interesting though that just a few days ago, Reuters was predicting that “possible new wave of foreclosures” to become a reality:
Housing experts say localized warning signs of a new wave of foreclosure are likely to be replicated across much of the United States.
Online foreclosure marketplace RealtyTrac estimated that while foreclosures dropped slightly nationwide in February from January and from February 2011, they rose in 21 states and jumped sharply in cities like Tampa (64 percent), Chicago (43 percent) and Miami (53 percent).
RealtyTrac CEO Brandon Moore said the “numbers point to a gradually rising foreclosure tide as some of the barriers that have been holding back foreclosures are removed.”
So basically they are saying “Housing prices are bottoming, unless foreclosures increase, which we expect to happen”.
I’m often accused of being a perma-bear. I don’t really believe that I’m a perma-bear about housing. I believe that eventually the market is bound to stabilize. I am, however, a perma-bear on the American government’s housing policies. Foolish policies set the stage for the housing bubble and collapse, and foolish policies continue to extend the pain. In the meantime, it looks like Bob Toll we need to just keep on dancing.