Harvard has just laid the proverbial wet blanket upon the real estate industry with last week’s release of the 2008 “State of the Nation’s Housing Report”. The author of this scholarly tome could have been a collective Grim Reaper spreading the apocalyptic prognosis for the near-term housing market.
The always much anticipated Harvard Housing Report was anticlimactic this year. We already knew the outcome. No new news here?
The housing market is dismal and is a challenge to everybody connected to it. There is no light at the end of the tunnel – yet. No one can predict where the bottom might be but we’re not there yet. And the current economic climate is an added challenge, at least in the minds of the consumer, as rising fuel and food costs cut at the purse strings of mainstream America.
If anyone needs yet another analysis, albeit a reliable, scholarly source, of how we got to the current miserable state of real estate you can refer to Harvard’s report and lose yourself in the data, charts, graphs that back up the report’s findings. Stellar research.
Do we really need Harvard to tell us there is no good news on the housing front for the foreseeable future? They have been producing this report for 20 years and although it seems much to do about nothing new, we need to read closely for those pearls of wisdom hidden away in the telling of dire news.
If you want a really fascinating read check out Harvard’s 2004, 2005, and 2006 Housing Reports. In hindsight you will find the red flags portending the approaching housing bubble explosion. In almost every case those smart guys at Harvard were right-on. If we had only listened and seen past the mounting bank deposits.
Harvard…you have my attention.
Harvard serves up a glimmer of optimism…
“Nevertheless, demographic fundamentals still point to increased housing demand over the next decade. But the excess inventory must be worked off before the demand for new homes rebounds. This in turn requires a return to stable-to-rising home prices, sustained job growth, and accessible credit. When that happens, and assuming immigration remains strong, the inventory overhang will start to thin, prices will firm even more, and average annual production, including manufactured housing, will likely head back toward 1.9 million units.”
I usually love this academic attention to our industry issues, but this time I feel a little worn out by the efforts behind old news. Wait a minute; I think that is once again really unfair. It is not old news….it’s just that the news on the real estate front has not changed much, except to get slightly worse.
But one day, things will be different and the intelligentsia will once again view with hope and promise, a real estate industry with sound economic foundations.
…But not today, and probably not tomorrow…