A housing bottom?

The housing market is deflationists’ ace in the hole. There is no way inflation can re-ignite as long as housing prices continue to plunge, they argue. And housing won’t recovery as long as unemployment remains high. And unemployment will remain high for years. Or so the argument goes.

There is growing evidence, however, that housing prices may be in the process of bottoming.  Consider:

Granted, all of these encouraging signs could abruptly come to an end if the homebuyer tax credit isn’t extended. And part of the uptick in prices may be seasonal. And high-end properties aren’t selling as fast as low-end ones. And there are lots of foreclosures in the pipeline. And mortgage rates could quickly rise if inflationary expectations increase.

Nevertheless, October 2009  isn’t October 2007 and it isn’t October 2008.  We have already experienced dramatic declines in housing prices in many markets, and although it’s certainly possible we will see further declines, deflationists must accept the possibility that the market for housing — especially low-end housing — may be at or near the bottom.


One Comment on “A housing bottom?”

  1. […] for low-end houses in some post-bubble cities, such as Las Vegas and San Diego, is very strong. Nationally, housing prices have been rising in recent […]

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