Economy.com expects market will stabilize

WEST CHESTER, Pa. – A report released this week by Moody’s Economy.com says that although the housing market has seen “unprecedented” downturn, home prices are expected to stabilize by the end of 2009.
“Despite the darkening national economic outlook and the weak conditions in the housing market, some positive signs give hope that a bottom in the housing market is coming into view …” according to the executive summary of “Housing in Crisis: When Will Metro Markets Recover?”
Prepared by a team led by Moody’s Economy.com Chief Economist Mark Zandi, the report says that home prices will have dropped by greater than 20 percent in 62 percent of 381 metro areas in the United States. In 10 percent of metro areas, price declines will top 30 percent.
Now, about 50 percent of metro areas have seen greater than 20 percent drops in home prices, the report says.
“Almost three years into the housing downturn, most indicators of the market’s performance continue to worsen,” the report says. “By the end of 2008, construction had fallen to its slowest pace since the Census Bureau began collecting data in 1959, inventories of homes were at a record high and house prices had plummeted.”
Moody’s Economy.com, a division of Moody’s Corp. (NYSE: MCO), is a independent provider of economic, financial, country and industry research. Additional information is available at www.moodys.com.