Just Released: the 2008-2009 State and Metro Forecasts
• Markets in the Northeast and South, with the notable exception of Florida, will recover ahead of markets in the Midwest. The industrial states are at greater risk of continued weakness than the farm belt, and the Western markets in Las Vegas, Phoenix and California will be the slowest to recover.
• Developments in financial markets in the second half of 2007 and early months of 2008 have undermined rather than contributed to recovery in the housing sector. Housing sector activity has been depressed by an additional 30 percent due to the credit market crisis.
• Single family housing starts are down 63 percent from peak levels of production during the housing boom with some of the most troubled markets down 80 percent or more.
• The toxic combination of lax lending standards and stagnant or declining house prices in many markets creates the potential for downward spirals with resetting mortgage terms and declining prices forcing foreclosures that depress prices further forcing additional foreclosures.
• The most troubled markets are in Florida and California, and include Las Vegas and Phoenix, AZ, but the twin problems of inflated house prices and questionable mortgage lending are not isolated.
• Housing markets across the country will experience another difficult year in 2008 before recovering in 2009. Recovery will be uneven with some of the most troubled markets declining through 2009.
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These forecasts include downloadable Excel tables of total single-family and multifamily housing starts by regions and states. (Available for HousingEconomics subscribers only
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