Housing Market Woes Persist

Kiplinger reports:

It’s no wonder that Washington is stepping in with more help for the housing market with plans to remake mortgage giants Freddie Mac and Fannie Mae and pumping billions more into loans. The outlook remains troubling.

Prices have an additional 5% to 8% to drop before bottoming at about 40% below the 2006 peak. The turn won’t come until sometime next year. Mark Vitner, senior economist with Wells Fargo, says, “most of the price decline is behind us, but we’re likely to see a long and difficult recovery.”

Recovering previous peaks will take years—a minimum of four, even in states, such as Texas, Okla., Ark. and Wis., that haven’t suffered greatly. In hard-hit Calif., Ariz. and Fla.—where the plunge in prices will near 45% or more—it’ll take 15 to 20 years, according to Celia Chen, an economist with Moody’s Economy.com. For most of the rest of the country, figure on a range of seven to 12 years before prices regain lost ground.

You'll want to read this one, it's a great summary of what's going on in the housing market.