David M. Berson is Professor of Medical Science at Brown University.[1] (wikipedia)
It's possible the condo market could see a very big drop.
I was surprised that the sales numbers went up, even with the good weather. It doesn't change our view that the general trend in housing activity is downward.
We expect housing activity to drop about 8 percent this year -- it's primarily because of the investors' slowing purchases.
In some parts of the country, affordability has fallen to levels we have not seen in 20 years.
In some cases, they probably have. Yet in another situation, the consumer will use the same loan to really benefit their situation. It's never an easy call as to what is going to work and what is not.
There's no sign that investor demand has softened at all. The things that would have caused a slower housing market, such as higher mortgage rates, simply aren't present, and we're now almost halfway through the year.
We'll still be doing a lot of this content. It just won't be in a stand-alone show.
Fortunately, continued job and income growth and the overall economy growth will help to offset the fall in housing activity that otherwise would occur.
We can't find a period when the investor share of home sales has been higher than in the last year. In the fourth quarter, it looked like investors were starting to step back.
The bulk of the decline in home sales this year will come from investors leaving the housing market. If home price gains have peaked, as we expect, and financing is more expensive, investors are going to find someplace else to put their money.
