Chase CEO and Fannie Mae economist see improvement in 2012. But another analyst says recovery is still a long way away.
By Teresa at MSN Real Estate Tue 10:35 AM
“We have seen the worst. We are at the bottom. We may hug along the bottom for a while, but we are at the bottom,” Jamie Dimon, CEO of JPMorgan Chase, told Maria Bartiromo in a Q&A published in USA Today.
That doesn’t mean that happy days are here again, he cautions, but there is light at the end of the tunnel.
“Supply and demand are rapidly coming in balance,” he said. “Renting is now more expensive than buying in half of America. We’re adding 3 million Americans a year … 2 million jobs, and all this shadow-inventory stuff will be getting better, not worse. And it’s the rate of change which is important, not the absolute level.”
He added: “It’s still terrible, by the way. But we think it’s going to get better over time.”
Fannie Mae chief economist Doug Duncan agrees with Dimon that housing is ready to start adding a small boost to the economy.
Modest housing recovery predicted in 2012
“With an expected improvement in housing activity in 2012, residential investment should start contributing to growth, albeit only modestly initially,” Duncan and Orawin Velz, a director in Fannie Mae’s economics and mortgage-market analysis group, wrote in a Fannie Mae forecast released last week. The two predicted that home sales would rise 3.5% in 2012 and that housing starts would rise 16%.
Bankers: Home prices won’t recover before 2020
But Lance Roberts of Street Talk, in a post titled “Anything other than the Apocalypse is a win,” predicts we won’t see a housing recovery this year and probably not for a long time. He writes:
Despite rumors to the contrary, real estate will continue to struggle not only in 2012 but well beyond. The bursting of the real-estate/mortgage? bubble is not something that is solved in the course of a couple of years – especially in a case where the excesses took two decades to accumulate.
No comments yet.