Jan. 5 (Bloomberg) -- What will the New Year bring for
housing markets? Prediction is a perilous business, but history
and basic housing economics suggest that price changes will stay
modest, and that construction will increase only slowly. The
best that can be said about the current market is that it offers
abundant affordability and that the broader economic recovery
doesn’t depend on a big housing rebound.
The most recent S&P/Case-Shiller housing-price data show a
second month of seasonally adjusted price declines. The overall
20-city index dropped about 3.4 percent from October 2010 to
October 2011, after falling less than one percentage point
during the previous year. In nominal terms, the 20-city index is
at the lowest point since March 2003, and in real terms, we’re
below where we were in October 2001.
