Ways to cope despite real estate’s dire outlook
If you’d asked housing economist David Seiders at this time last year to forecast the real estate industry’s future, he would have told you to expect “a recovery year” in 2008.
“That outlook has been cut dramatically from what I was saying a year ago,” Seiders, chief economist for the National Association of Home Builders, concedes. He’s slashed his projection for home construction by 35% and says 2008 will be “another down year” for housing overall.
How far down? Most economists caution that their real estate forecasts for this year stand on shaky ground. The depth of the downturn will depend on whether the overall economy slips into recession, how fast and how sharply home prices fall, whether more turmoil rocks the credit markets and how many more foreclosures lie ahead.
“We’re really in a danger zone in terms of overall economic activity,” says Seiders, who sees a 40% chance of recession this year, up from his earlier estimate of 30%.