Deep into a Monday Midday discussion on jobs and budgets, Minnesota state economist Tom Stinson made some important points about housing with a "guess" that local home values could slip other three to five percent.
"It's going to be a lot better than it was last year, but that's still just a really miserable market," Stinson said of housing and home construction generally.
In 2008, he said, the U.S. had nearly one million housing starts, which was the lowest number since World War II. "In 2009, we had less than 600,000...This year we could have a 25 percent increase and it's still going to be the second lowest number of housing starts since WWII."
Foreclosure and short sale problems "are going to be depressing housing prices of existing homes for a while, he added.
"Our guess is we're probably going to lose another three to five percent locally and nationally on housing prices before things turn around."
Stinson's comments surprised me because the Minneapolis Area Association of Realtors in December said the Twin Cities market was on "recovery road."
Maybe there's no conflict between the two statements. Maybe "Recovery Road" is a lot longer than we think.
Click on the play button and start at the 39:20 mark to hear Stinson's housing comments
And then tell us what you see and if it jibes with Stinson's forecast. Post below or use this form to tell us what the housing market is like around you.
Click on the map icons below to read what Minnesotans in MPR's Public Insight Network have been telling us about the housing climate.
Recovery means many things - home prices are a lagging indicator - they peaked in 2006 and didn't start to fall in earnest until 2007/2008 yet inventory climbed every year since 2002 & sales peaked in 2005.
Price is a sticky issue - what price are we talking about? The median sales price may go up because more mid-priced homes may sell this year than last - prices haven't gone up in that case but our statistical measure of prices have.
There are many metrics in housing and very often we have everyone talking about something different.
Part of this dynamic is the ability of individuals and families to qualify for a mortgage. For those folks that are relocating to another area due to employment, lower prices and (arguably) better values mean zip if they cannot get a mortgage. Others who might have otherwise been considering an "upgrade" are now staying on the sidelines. If prices continue to decline, those who can get mortgages may be more inclined to jump back in.
The years of easy mortgages are over. Even after the financial sector completely cleans up its books, it is a reasonable assumption that they will not (or will not be allowed to) go back to previous lending practices.