From RealTrends.com: As the economy recovers, markets will stabilize but the old “normal” will not return, according to a new study by John McIlwain for The Urban Land Institute.
Here are ULI’s predictions:
· Home prices are stabilizing in many parts of the country but overwhelming challenges remain; national housing prices will fall another 10 percent this year until they stabilize in the second half of the year or in early 2011. This assumes that job losses come to an end in the next few months and unemployment begins to decline this year.
· The biggest challenge to the housing markets today is the growing number of homes with mortgages that are underwater. By the end of this year some 40 percent of all homes with mortgages are predicted to be underwater.
· After the recession, demand for housing will increase. There are four demographic groups that will drive housing markets for the next decade:
· Older Baby Boomers will become seniors in unprecedented numbers. Many younger Baby Boomers may be unable to sell their current suburban homes to move to new jobs.
· Generation Y will be renting far longer than past generations.
· Immigrants and their children may want to move to the suburbs but may find them too expensive even after current drop in housing prices.
· Workforce housing will remain a challenge. The outer suburbs will have the least expensive housing but the cost in time and money of long commutes will eliminate the any savings.