The U.S. housing market probably will avoid a “double-dip” next year as a recovery depends on job growth, said Susan Wachter, a real estate professor at the University of Pennsylvania’s Wharton School.
“Nationally, we’ll see a bumpy ride instead of a double-dip,” Wachter said in an interview from Philadelphia today on Bloomberg Television. “Jobs are key.”
Mounting foreclosures and an unemployment rate close to 10 percent are depressing homebuyer demand and reducing prices. The S&P/Case-Shiller index of property values fell 0.8 percent in October from a year earlier, the biggest annual decline since December 2009, a report this week showed.
Sales of new and existing homes last month rose less than projected by the median forecast of economists surveyed by Bloomberg, reports from the Commerce Department and the National Association of Realtors showed last week. Demand has slumped since the start of the year after the expiration of tax credits of as much as $8,000 for homebuyers.
The market should improve in the second half of 2011 as the effect of the tax credits ends, Wachter said.
“That’s going to be with us for another few months,” she said. “But that influence is petering out. By the second half of the year we certainly will see no more of that and we should be into a better environment because that’s out of the game.”